The Spanish mortgage debt market: Key features and considerations for regulatory reforms
Fecha: abril 2013
Autores: Santiago Carbó Valverde, Francisco Rodríguez Fernández
Etiquetas: Mercado inmobiliario, Morosidad, Deuda hipotecaria, Dación en pago
Spanish households are facing a substantial deleveraging challenge. Even if the average mortgage loan has declined from 150,647 euros in 2009 to 112,875 euros in 2012, residential mortgage debt still represents around 64% of Spanish GDP. Additionally, Spain is the fourth largest mortgage market in Europe. Taking mortgage-backed securities and covered bonds together, it is the second largest country in the EU (only after the United Kingdom) in terms of securitized mortgage debt, with an outstanding volume of 683 billion euros. Although macroeconomic conditions have not been favorable, the quality of the mortgage portfolio of Spanish banks has not deteriorated significantly. The non-performing ratio of these loans (NPL) was 3.49% in 2012Q3. Despite this relatively low level of NPLs, foreclosures have been increasing. Recently, they have been particularly on the rise, such that foreclosures and evictions have caused significant social debate surrounding mortgage regulation in Spain. The Government is supportive of several measures currently under Parliamentary debate designed to alleviate pressures on mortgage debtors; however, opposed to the proposal to reform retroactively dation in payment. In our view, implementing retroactive non recourse mortgages would be more harmful than beneficial for the Spanish economy, thus, providing support to the Government’s position.