Podemos tries to relocate housing in the campaign: announces a law to alleviate the rise in mortgages

Podemos tries to relocate the framework of the electoral campaign in housing after, first, the ETA candidates included by EH Bildu and, later, the Vinicius case have swept the strategies of the political parties to turn their preferred issues into the axes of the political debate. The purples had relied on the new Housing Law to be their main asset to resist this 28-M, and in fact, in campaign events they have been calling on voters to consider these regional and municipal elections as a “referendum” on this problem. Now, four days before the polls, he is again influencing this issue by announcing a new law to rescue families who cannot afford the sharp rise in their mortgages due to the upward revision in interest rates.

The general secretary of Podemos, Ione Belarra, has indicated in an act in Tarragona that Unidas Podemos will present in Congress a bill to create a rescue fund with money contributed by the banks that would serve to pay the increases in the quotas of the mortgages that families cannot assimilate due to their economic conditions, in a drastic change in the amounts that they had been assuming.

This new Social Responsibility Fund would enter these cases to “protect” these families by facing the part of the mortgage increase and avoiding scenarios of non-payment or maximum stress for those households.. This money fund would be nourished exclusively with contributions from financial institutions that carry out their activity in Spain.. As Podemos points out, it would also be a way to achieve “the return of the 2008 bank bailout.”

Podemos sources warn of the consequences that will come from June for many families with the annual review of their variable mortgages, which threatens to cause “a massive increase in defaults on mortgage loans and consumer loans with terrible social and economic consequences.”. Given this circumstance, the group United We Can finalize a new law to prevent this from translating into a “wave” of evictions. The proposal announced by Belarra is unilateral from United We Can and is not agreed with the PSOE, which is decisive in clarifying its course and success in Congress.

The proposal establishes the creation of the aforementioned Financial Sector Social Responsibility Fund, which would be created “in the image and likeness of other funds such as the Deposit Guarantee Fund or the Salary Guarantee Fund”. It would be made up “compulsorily” of all the financial entities that work in Spain and will be directed by a management commission with a majority of representatives of the public sector, made up of representatives of the ministries of the corresponding subjects (in Economy, Finance, Housing, Consumption and Social Rights), as well as by representatives of the Bank of Spain and also by some representatives of financial sector entities.

The management commission and the Bank of Spain would establish a formula by which they would calculate how much money each bank must contribute to the fund. The law will establish criteria, for example, the size of the bank, the client portfolio, the credit risk and a forecast or estimate of possible contingencies and negative externalities of the financial sector, inform sources from Podemos. However, the purple party already speaks of an approximate figure for the banks' contribution: 0.15% of their total credit volume: approximately 1,500 million a year.

dation in payment

Likewise, the initiative has other far-reaching measures. The main one is dation in payment, a historical demand of social movements. The bill limits the liability of the mortgagee to the home. “If an individual cannot pay his loan, handing over the house to the creditor or if it were taken away in a legal proceeding, the debt would be settled,” sources from Podemos say.

Another outstanding point is the “establishment of rights and obligations to the parties in credit assignments”, which are operations through which financial institutions buy and sell mortgage loans (as creditors) to other banks. “Now, the debtor of the loan is a 'stone guest' and there is no need to notify him of this operation; however, with this law, entities are obliged to inform the conditions of the credit assignment operation to the debtor , so that he can exercise his rights of: first refusal, preferential acquisition or withdrawal. That is to say, that you can test the bank to choose to pay that credit and even liquidate it; as a debtor, who has preference over any third party to acquire that loan; and retraction is the assumption that, when they do not want to pay it to the first entity and it is sold to a third party, the debtor can pay the amount or amount for which the credit has been assigned with interest to the new creditor”, they explain from the purple party.

Contract renegotiation

The bill also enters into the regulation of the 'Rebus sic stantibus' clause, which is a doctrinal idea to provide solutions when a contract cannot be fulfilled due to circumstances beyond the control of the parties.. For example, an economic or health crisis or a natural disaster, which have unexpected consequences.

The United We Can initiative proposes creating “a mechanism to renegotiate those contracts”. There are three routes: extrajudicial, judicial of voluntary jurisdiction and the ordinary judicial route.. The latter is to force that this contract can be fulfilled “in viable conditions, even if these conditions are modified.”

In this sense, it is proposed to establish “mandatory solutions to be applied by the financial institution in the event that it has not agreed to renegotiate this type of contract”. “In this way,” sources from Podemos explain, “and once the circumstances that motivate this clause of impossible compliance with this type of contract have been accredited, as well as the bank's null will to renegotiate, with this new law mandatory deductions and dation in payment will be applied “.

Focus on good practices

The fifth outstanding point of the law is the modification of the Civil Procedure Law to protect debtors to introduce, among other things, that judicial proceedings can be suspended when a contract is being renegotiated.

Likewise, “it is prohibited to order a foreclosure in the event that the bank has breached the code of good practices or any extrajudicial dispute resolution instrument (mediation)”. Procedures will also be paralyzed when there is an open cause for unfair terms.

Sources from Podemos point out that breaching the code of good practices will cause the foreclosure to be filed.