There is a court order doing the rounds on professional law forums these days, showing judges how to legally stop foreclosed home auctions.
The document is signed by Guillem Soler, a judge from Barcelona, and it represents a tool to aid people who are in the process of losing their homes. It is also evidence that Spain’s judges are starting to work together against the ongoing drama of evictions.
In a country with extremely high ownership rates and soaring unemployment, thousands of borrowers are finding themselves unable to repay their mortgages. In the last three years, the number of foreclosure claims reaching the courts nearly quadrupled, according to the General Council of the Judiciary legal watchdog.
Until now, individual judges were coming up with creative ways to stop home auctions at the 11th hour. But last month they received support from a European ruling that called Spain’s mortgage law unfair to consumers because it does not let judges temporarily halt evictions to investigate claims of abusive contract clauses. Spain’s government is now under obligation to change the law to allow for this option. Until that happens, presumably in May, judges have decided to act.
Last Thursday, it emerged that Barcelona’s judges have agreed to consider mortgage late fees of over 2.5 times the legal interest rate “abusive.” On Friday, Valencia’s judges set the limit for abuse at three times the legal rate. Málaga’s judges met last week to discuss the same issue.
Barcelona judges have agreed that from now on, people facing eviction will be told about the option of opposing the procedure on grounds of abusive clauses. This same option was made available in Mallorca just five days after the Luxembourg court ruled that Spanish legislation was too tough. “It was a natural thing to do,” says Carlos Gómez, chief justice of the Palma Provincial Court. “All of Spain was waiting to see what Europe would say.”
Perhaps the city fastest to act was Bilbao, where judges began stopping evictions in November. “Since then, there have been practically no foreclosures of first residences,” says the dean of Bilbao’s judges, Alfonso González-Guija. “The problem, I feel, is one of uncertainty. The situation is confusing: what do we do?”
It was this confusion that led to heated debates on professional forums and resulted in these initiatives. While they are all non-binding agreements, they will help avoid contradictory rulings until a revised mortgage law is ready. Essentially, judges are establishing the preliminary limits on abusive late fees, along the same lines as the reformed mortgage law is expected to do. If late fees are considered by a judge to be abusive, this rate will automatically be brought down to zero.
“We’re at an impasse, doing whatever we can,” says one judge, who declined to be named. “We are busy and worried. The nice thing is there is a lot of internal debate going on, which is a fascinating thing to any jurist.”
“Spanish legislation is overwhelmed,” confirms Jaime Anta, a judge in Santander. “We are getting organized until we get a norm that complies with European legislation. We are looking for provisional solutions. The Spanish lawmakers did not do their homework and they have placed us in this strange situation.”