Zapatero announces plans to prevent foreclosures

Spanish prime minister Jose Luis Rodriguez Zapatero has announced that he will introduce measures to help families avoid losing their homes.

Bloomberg reported that the country's premier has promised to take steps to ease the burden on those at risk of foreclosure, adding that any action will be "compatible with the imperatives of financial institutions' solvency and legal security".

There have been calls for homeowners to be able to cancel their debts by handing over the property to the lender. Under current Spanish law, if a dwelling is repossessed and sold for less than the value of the mortgage, the bank can claim back the difference from other assets and even future earnings.

Meanwhile, an article in The Olive Press on June 24th 2011 published figures from the Bank of Spain, which show that after inflation, house prices have dropped by 20 per cent since the first quarter of 2008.

And the institution predicted that further falls in value across the Spanish property market are likely before the sector turns a corner and begins to recover.
 

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