Business, Economics and Jobs

Spaniards battle against banks


People protest against evictions in Madrid.


Pierre-Philippe Marcou

BARCELONA, Spain — Clara Barzola and her husband Gilmer Cedeno are lucky. Facing foreclosure and eviction from their Barcelona apartment, they managed to convince their bank to accept their deed for the property in exchange for forgiving their debt.

It took three months of fighting, with help from anti-evictions groups that applied constant pressure and guerrilla tactics.

“We protested in front of the bank’s office many days,” Cedeno said. “We put glue in their ATM machines, threw garbage and I even chained myself to their door.”

Although their agreement doesn’t guarantee Barzola and Cedeno will be able to remain in their former apartment, they are negotiating with the bank to stay on by paying a new low rent.

Many others haven’t been so fortunate.

Evictions have left 15,000 families homeless here since the country’s economy began to spiral out of control in 2008. However, their mounting plight landed on the political agenda only recently, after prompting a wave of suicides.

At least eight people are known to have killed themselves since October after receiving eviction orders, most recently a 47-year-old man in the southern village of Ardales. He, his wife and one of his two children had lost their jobs. Unable to meet their mortgage payment, he was negotiating their looming eviction with his bank when he died last week.

A day earlier, Dolores Garcia, 52, jumped from the balcony of her apartment in Malaga after getting her eviction order. Amaya Engana, 53, of Barakaldo in northern Spain and Jose Miguel Domingo, a 53-year-old Granada resident committed suicide in October. Domingo hanged himself just hours before officials arrived to evict him. Engana jumped from a window of her apartment as officials were climbing the stairs outside two weeks later.

But Spaniards are fighting back.

Grassroots organizations are lobbying to change Spain’s eviction law, one of Europe’s toughest. Among them, the Platform of Those Affected by Mortgages (PAH) has stopped more than 500 evictions through litigation and nonviolent resistance.

“The Spanish government along with the banks are responsible for those deaths,” spokesperson Ada Colau says of the recent suicides.

She blames politicians for encouraging people to believe that buying homes was a safe investment during the country’s boom years in the early and mid-2000s. She says the government implemented fiscal policies that encouraged purchasing over renting despite overvalued property prices.

Banks also deceived customers with “abusive clauses,” she adds, by failing to fully describe what they were signing. Many didn’t realize that giving their property to the bank wouldn’t satisfy their debt if they were to be forced into foreclosure.

When the property bubble burst in 2008, the ensuing economic crisis affected millions. With an unemployment rate of 25 percent and more than half a million families with no monthly income, many now face a stark choice between buying food and paying their mortgages.

Critics have accused center-right Prime Minister Mariano Rajoy of favoring banks over average people by failing to address what many have called an unfolding social tragedy.

But his government has been under pressure since the recent suicides made headlines around the world. Both the European Union and United Nations have criticized the evictions.

Last month, the government approved a two-year moratorium on evictions for the “most vulnerable cases.”

The measure applies only to families that earn less than $2,100 and meet other criteria, such as facing mortgage installments higher than half their income and supporting children aged three and under. The government admits the new rules will apply only to around 120,000 families.

Grassroots organizations call the new law “arbitrary” and “discriminatory.”

“Why does the government protect a family with a three-year-old but not one with two four-year-olds?” Colau says. “It’s an evil system that will make the poor compete against each other.”

Toni Tallada, spokeswoman for 500x20, which advocates the “right to a decent home,” agreed. “This is a smokescreen to whitewash the government’s image because it doesn’t solve the problem, it just postpones the drama,” he said.

He criticizes the measure for failing to tackle the underlying issue, Spain’s draconian evictions law, which dates from 1909.

Unlike in the United States and other countries, former owners of foreclosed homes retain their debts. Only a few who have offered resistance have been able to avoid eviction.

Banks typically put foreclosed homes up for auction. If properties don’t sell, banks can keep them for 60 percent of their value. Owners must pay the difference, amounts that are often higher than homes’ original cost because mortgage holders who skip payments face steep interest rate hikes.

That’s what happened to Jaime Cadena, a 45-year-old construction worker who bought a 600-square-foot apartment in a working-class Barcelona neighborhood in 2006 for $325,000.

Even though the bank took legal ownership in 2010, he still owes more than $250,000.

The bank had approved Cadena’s mortgage even though it ate up almost two-thirds of his monthly paycheck of $1,650. Interest rate hikes brought the monthly payment to $1,270 before he lost his job in 2009.

“I should have sought legal advice at the time, but the bank misled me by giving me a huge credit,” he said. “They knew I wouldn’t be able to pay back the debt sooner rather than later.

“I’ve always been a hard-working person, but now I feel like a criminal,” he added.

But Cadena has joined others putting up a fight. With four children and one grandchild living under his roof, he says they have nowhere else to go. He’s managed to stop four eviction orders thanks to help from PAH and 500x20.

“The last time, eviction officials came to my building with six police officers,” he said. “But I was waiting inside with 20 other activists and the door was barred from the inside.”

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With no end in sight to the euro crisis, PAH has begun acting together with other groups and unions. They have collected 600,000 signatures for a petition that demands parliament pass an immediate moratorium on all evictions, force banks to accept property deeds in lieu of foreclosures and establish low “social rent” levels for those who have lost their homes.

“There are lives at stake,” Colau says. “We won’t stop until there’s a solution for everyone.”

Editor's note: This video was originally published on Aug. 20.