Spanish mortgage nightmare debt defaulters face (AP)

Alcalá DE HENARES, Spain – Inma Rodríguez lost his job, and now that she has defaulted on her mortgage, she is about to lose his home. But the nightmare does not end here: once creditors kicking off, she still must repay the money he borrowed to buy his house.

Mortgage is an anomaly in most of Europe, but especially acute in these days in Spain, a country grappling with an economic crisis triggered by the collapse of a housing bubble. Since the collapse of 2008, more than 300,000 have been affected by the potential double-whammy of eviction and heaps of mortgage debt.

"It hurts so much," says Rodriguez, choking as you raise your eyes to the ceiling of the House where he lived for 30 years and raised two children.

Under the terms of his contract, Rodriguez probably will have to pay nearly half of its bank debt of euro200, 000-plus ($290,000), plus court costs and fines after she leaves — in stark contrast to the United States, where the defaulters may return the keys to the Bank and walk away from their debt.

Defaulters are a small minority in Spain — nearly 98 percent of mortgage holders are up to date on payments. But their plight is generating a wave of solidarity as unemployment soars to record levels: when an eviction appears imminent, protesters often congregate by the hundreds outside the property to try to block it.

In rallies, demonstrators formed a human and physically prevent cushion clerks and officials of the Bank with a blacksmith in tow to expel residents. The Association behind the demonstrations knew about 50 times since 2009, although ultimately only delays the inevitable.

Last week, the Government approved a decree which seeks to address the situation of debtors evicted. Protects more of their wages to be supported by banks and changes the way that debt post-foreclosure these people is calculated, to try to cut.

If the Bank manages to sell a House foreclosed, this amount is affected the remaining debt. But the norm these days is that the property is presented for auction and no bids. That meant the Bank then takes over the House for only half its value originally estimated and cleans the amount the remaining debt — leaving the borrower again due to a beam. The legislation passed last week raises the proportion that the Bank must pay effectively in case of non-selling at 60 percent.

The platform for victims of Mortgage — Association staging rallies threshold — wants Spain to inaugurate in U.S. mortgage legislation-style. But the Spanish Banking Association says that would wreck the mortgage system of low interest rate of Spain: even now, how to increase the rates of loan-shy banks, may be under 3 percent, with repayment periods than more than 40 years and no mortgage insurance required.

The result, they say, would banks granting suffer less expensive, more and more small loans that are repayable in a shorter time, meaning the almost 98 percent of mortgage holders who make their payments on time.

"Taxpayers good would be the ones to be injured," he said.

But Rodriguez, an unemployed cleaning lady of 56 years, said that she fell victim to a rapacious eager to lend money. She says that she can barely read or write and gets confused in gumbo of his financial woes thick, shared with estranged husband.

Rodriguez and her husband Manuel, who worked as a painter and a Carpenter, took out a second mortgage in 2006 to pay off debts, remodel their apartment with 3 bedrooms in this town outside Madrid and buy furniture and a new car.

"I didn't even know what I was signing," says in a living room with empty shelves and a cuckoo clock broken, Rodriguez as three small Yorkshire terrier yapped at his heels.

Six months after taking of mortgage, Rodriguez and her husband separated. Since then, she complains, he chipped in a dime to the euro1, 000-plus mortgage month. She has worked in almost two-and-a-half years, and even when it did gained euro500 just one month.

"They made it so easy. Rodriguez, so easy, "he said. "If we hadn't bought anything or done all this, it would not have to anything now."

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