A generation is at risk. For them, the crisis will be long, but almost eternal. Most are in their thirties and, in addition to age, have another aspect in common: they bought a full housing bubble that could not afford. In a public auction financial institution that granted the loan has been with her, usually by 50% of the value it was appraised.
loss area has been a real trauma. However, now face an even greater: he still owing money to the cash or bank. Its debt is equivalent to the sum of three factors: the difference between the outstanding loan and the value of the property at auction, default interest and legal costs. To collect it, the entity will be directed against other present and future assets. If they are not but have a payroll, seize a part of it. In most cases, the failure is due to the loss of employment of borrowers or a dramatic reduction in their income. That is, bad luck, since neither they nor the banks, or banks, and almost nobody was able to venture the depth and duration of the current crisis.
To solve the problem, does not seem appropriate to replace the law of mortgages made in Spain by the Americans, as the more expensive and would reduce their number. I do not see it appropriate that the difference between the current price of housing and the outstanding mortgage amount shall be borne entirely by financial institutions because it would further complicate the future survival of many banks and a bank, significantly delaying the normalization credit market.
The uniqueness of the situation requires the government to take extraordinary measures of limited duration. Should forgive outstanding debt for all families affected by more than 250,000 foreclosures occurred since early 2008. In addition, establish a limited period in which any borrower by payment in full to pay off the debt. Unfortunately, today there are many families who are in the process of foreclosure or about to stop paying your loan.
In return, the banks receive from the Administration for several years lump sum equal to the loss imputed. Given his current situation so hopeless citizens are going to donate either hidden or visible high volumes of money. Thus, a portion of these revenues go toward the most disadvantaged by the crisis. For a mistake or bad luck, we can not lose a generation. In economic news, everyone deserves a second chance.
Source: Gonzalo Bernard (El Periódico)
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