Mortgage foreclosures drop by half in Alicante
NOWADAYS Alicante banks are filing fewer mortgage foreclosures when owners can no longer keep up with payments.
This is mainly due to the improved economic situation, which means there are less people defaulting on their mortgages, and also because the European Court of Justice (ECJ) has still not ruled on the legality of certain aspects regarding the Spanish banks foreclosing on mortgages.
As a result, mortgage foreclosures have dropped by 50 per cent in comparison to a year ago, bringing them to pre-economic crisis levels.
This is not only happening in Alicante province, but pretty much the same is occurring throughout the rest of Spain.
The current economic situation has allowed many mortgage holders to get jobs again, and they are catching up with their back payments.
The property market has recovered as well, to the point that bank clients with economic problems are now able to sell their properties, cancelling out their mortgages. This was not an option a few years go, as nothing was selling.
The banks themselves are also more inclined to find other solutions before foreclosing on a mortgage, as they want to avoid accumulating properties in their possession.
The major reason for nonforeclosures is definitely due to the wait on clarification from the ECJ.
Spanish courts have currently put the majority of repossessions on hold until the ECJ makes its ruling.
The ECJ originally declared illegal a clause that allowed banks to foreclose demanding the full amount owed, due to just one unpaid mortgage installment.
The ECJ ruled that for foreclosure to happen, one unpaid installment had to be a significant amount of money.
The problem is that they did not specify what they considered "a significant amount", so the Spanish Supreme Court has requested clarification on the ruling. Therefore the majority of courts have halted foreclosure proceedings for the time being.