The drama of the economic crisis in Lanzarote is not only reflected in almost 16,000 unemployed people. Unfortunately, evictions are affecting many families on the island, who are losing their homes and, in addition, have to continue facing the mortgage. The Courts of Arrecife, especially the five courts of first instance, see this reality daily. According to judicial sources, each of them holds about 15 auctions per month, approximately. That is, around 75 homes in Lanzarote are auctioned off every 30 days.
Precisely, from these courts they assure La Voz that with the crisis "the holding of auctions has increased dramatically." "There are many people who have lost their jobs, have started to have problems paying the mortgage and finally the bank has foreclosed on their house," they indicate. The execution of mortgages began to grow from the years 2006-2007, before "they were practically not seen." And, in recent years, evictions are constant.
In Lanzarote, these evictions mainly affect people who signed their mortgage at the beginning of the year 2000, "when the real estate bubble was at its peak." Hence, those affected have a large part of this loan left to pay, since in the last decade mortgages have been signed "for 20, 30 or even 40 years." "There are evicted people who have only paid the bank for the first three or four years," they indicate.
When those affected reach this dramatic situation, when they cannot cope with the payments, the bank forecloses on the house, which ends up being awarded, normally, to the bank itself through an auction. From there, an order is issued and in "three or four months they have to leave their homes."
La Voz de Lanzarote witnessed several auctions in one of the courts of first instance in Arrecife, which were not attended by any bidder and only attended by personnel from the banks with which the evicted had contracted the mortgages.
In the first of the cases, the attorney of Banco Español de Crédito was awarded the house for 99,626.14 euros. The next auction was only attended by the attorney of Caja Insular de Ahorros, who was awarded several independent properties worth 146,000 euros. "All the houses are being kept by the banks, which have even created parallel companies that are in charge of real estate management," they say.
The bank has the possibility of awarding the house, at a minimum, for 60 percent of its price. "It can be awarded for 50 percent of the value of the property, but for that there must be bidders and it is more complicated, now that is no longer seen," they explain to La Voz during the auction.
Auctions without bidders
And it is that, according to judicial sources, a few years ago auctions of real estate in Lanzarote were very unusual, but in those that were held "the presence of bidders was noticeable." "Any natural or legal person can bid, but lately no bidders are seen because the debt that the evicted have acquired with the bank is very high and it is not profitable for them," they indicate.
"Bidders want to invest, they are opportunists who come when they see business and now the business does not exist, because the bank may be owed 80 percent of the mortgage and, obviously, the financial institution is not going to allow bidding for less than that amount," they assure. "Bidders do not invest 3 euros to get 3.05 euros, they invest three euros to get six," they exemplify.
In addition, the conditions for the bidder and for the bank are not the same when attending the auction. While the bidder must present proof of 30 percent of the appraised value of the property to be auctioned, which must have been previously deposited in the Deposit and Consignment Account, the bank does not have the need to consign any amount of money.
Payment in kind
Given the dramatic situation that all these evicted families are going through, the member of the Platform of People Affected by Mortgages in Lanzarote, Rafael Partela, considers that "these tragedies would be solved with payment in kind." This measure would be applied in cases of habitual residence and thus, when the bank executes the mortgage and keeps the house, the debt "would be liquidated."
"This is logical, that with the delivery of the house the mortgage is canceled. The bank never loses because it recovers the house and puts it back on sale. Their business continues to be round," he says, while defending the modification of the law.
Partela believes that what is happening in Spain with evictions "is terrible." "The banks are shameless, they live on usury, on making money at the expense of the misfortunes of others. They never lose, they have multi-million dollar profits, they keep people's apartments and sell them again," he denounces.
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