"Corrala Buenaventura Is Here to Stay!" reads this protest banner in Málaga. Credit: Inés Benítez/IPS

By Inés Benítez
MALAGA, Spain, Jul 28 2013 (IPS)

“You live there for free, don’t you?” asked a woman as she passed by the Buenaventura “corrala”, a community in a building in this southern Spanish city occupied since February by families evicted from their homes for falling behind in their mortgage payments due to unemployment.

“We don’t want any handouts. We want to pay, through a social rent scheme,” replied 42-year-old Yuli Fajardo, who was living in a tent before she found shelter along with some 40 other people in one of the 13 spacious apartments in this four-storey block of flats in the central Malaga neighbourhood of La Trinidad.

Occupations by homeless families of vacant buildings owned by banks or real estate agencies have multiplied throughout Spain since the economic and financial crisis broke out in 2007.

But as a collective phenomenon, the new wave of squats started in the nearby city of Seville with Corrala Utopía, a block of 36 apartments belonging to a bank that has been occupied since May 2012 by around a hundred people, 40 of them children, Juanjo García of the 15-M (the May 15 “indignados” – Spain’s Occupy movement) housing committee in Seville province told IPS.

They call themselves “corralas” to indicate that they are community and neighbourhood associations, similar to the concept of the typical buildings of that name with common courtyards and services that proliferated in working class neighbourhoods in Madrid and other Spanish cities in the 16th to 19th centuries.

The new squatter communities receive support and advice from social movements like 15-M, the Platform for Mortgage Victims (PAH) and Stop Desahucios (Stop Evictions).

The National Institute of Statistics (INE) reports that there are some 3.5 million vacant housing units in this country of 47 million people – nearly 14 percent of the housing stock – mainly in the hands of banks. There were a total of 363,000 evictions because of mortgage arrears and foreclosures between 2008 and 2012, according to a report published in January by PAH.

Yanira, 20, and her 18-year-old boyfriend José were renting a house until they lost their jobs and took refuge in Buenaventura, one of the four corralas in Málaga.

Montse, who has an 11-year-old daughter, also lost her job and could not afford to pay for housing. Macarena, the most recent addition to the community, lives on the ground floor with her two small children, after her “alcoholic father threw us out on the street.”

“Do you think any of us would be here if we had an alternative?” asked Fajardo, who regrets the unsuccessful attempts to negotiate social rents with the bank that owns the building, and says that according to a Málaga court ruling, the corrala is due to be evicted on Oct. 3.

Buenaventura has just been sold by the bank to a private investor, lawyer José Cosín told IPS.

“We asked for an opportunity for marginalised, poor and socially excluded people to make a go of it. We carry our stigma like a brand on our skin, and we are judged by it,” said Fajardo, adding that “decent housing is a human right.”

The root of the problem, according to García, is “the commodification of the right to housing” during the construction boom that preceded the bursting of the real estate bubble five years ago.

There are now thousands of empty housing units and thousands of homeless people unable to make their mortgage payments because they were left jobless. The unemployment rate is 26.3 percent, according to INE figures for the second quarter of the year.

In Seville, 10 vacant buildings have been occupied by families that are being advised by 15-M. The squatters are unemployed, work in precarious jobs such as construction, are young people with good educational levels who have left their parents’ homes, or are over 65, García said.

“We are fighting for a roof over our children’s heads,” said 28-year-old Lidia Nieto, a member of the Las Luchadoras corrala in a new building in the La Goleta neighbourhood of Málaga belonging to a real estate company, which has been occupied since April by nine single mothers with their children.

Nieto lives on the ground floor of the apartment block with her eight-year-old son Yeray. She has a weekend job cleaning businesses and offices.

“We saw this empty building and decided to occupy it,” she told IPS while she chopped vegetables discarded by a nearby shop “because they are damaged and can’t be sold.” She used to live with one of her sisters and her parents.

“We saw ourselves living on the streets with our children. Do you think if we had proper jobs we would be living here? I’ve been unemployed for two years,” she said.

“Collective occupations are completely legitimate and are based on practical and ethical reasons,” said Iván Díaz of the Seville 15-M housing committee, at a conference in Málaga.

Squatters in new corralas are demanding that electricity and water meters be installed, so they can pay for utilities.

María, who lives next to Corrala Buenaventura, told IPS she is on good terms with the squatters. But the vendor at a nearby fruit shop said he had heard that some neighbours complained about noise at night.

The Málaga city government cut off water to Buenaventura on Jul. 18. But after the families protested by camping all night outside the town hall, the authorities re-established the water supply the next day.

The government of the autonomous region of Andalusía, where Málaga and Seville are located, approved a decree-law Apr. 12 on the social function of housing, establishing the need for a stock of social housing units.

The regional law also provides for the temporary expropriation – for a period of three years – of the housing units of families facing imminent eviction, “in cases where there is a risk of social exclusion or a threat to the physical or mental health of persons.”

This measure, appealed in July by the national government of rightwing Prime Minister Mariano Rajoy on the alleged grounds that it is unconstitutional, has benefited “only 12 families for three months,” complained García, who said it fell far short and was plagued with “flaws and defects.”

The European Commission – the EU executive arm – and the European Central Bank criticised the Andalusían anti-eviction decree, arguing that it could undermine the stability of the banking sector and economic recovery in Spain, according to a Jul. 10 report.

Activists and local residents protesting eviction of a Moroccan family on Oct. 24, 2012 in Málaga. Credit:Inés Benítez/IPS

By Inés Benítez
MÁLAGA, Spain , Apr 23 2013 (IPS)

A new mortgage bill approved by Spain’s lower house of parliament would merely put a bandaid on the plight of people whose homes are being repossessed, and would not guarantee protection for most families facing eviction, activists complain.

The bill was passed Apr. 18 thanks to the votes of the right-wing governing Popular Party (PP), and is expected to make it through the Senate because the party also holds an absolute majority there.

Hundreds of thousands of families have been evicted since 2008 in crisis-stricken Spain, which has the highest unemployment rate in the EU – 26 percent.

The vote on the bill came after the European Court of Justice ruled Mar. 14 that Spain’s legislation was in breach of EU consumer protection laws because it did not allow judges to halt evictions, even if mortgage contracts contained unfair terms.

The verdict stated that judges must be granted the authority to delay repossession and eviction while reviewing mortgage contracts to determine whether they have “abusive” clauses.

The abusive terms referred to by the court ruling include late interest payments of 18 percent or evictions of homeowners after they have missed just one or two payments on a 30-year mortgage.

Under Spanish law, people must continue to pay off their mortgages, complete with interest and late fees, even after they have been evicted and their home – whose value is appraised by the bank itself – has been repossessed.

Several people who lost their homes or were on the verge of losing them have committed suicide in recent months, and the protest movement against evictions has ballooned.

The bill that has now gone to the Senate allows courts to suspend eviction for two years in certain cases where unfair mortgage terms have been identified, and sets a limit on late charges.

But it failed to respond to the main demand of the Platform for Mortgage Victims (PAH), a movement that collected 1.5 million signatures to demand that all defaulters be allowed to merely hand over the keys and walk away from the outstanding mortgage payments.

The petition, which also claimed that the change should be retroactive, was delivered to Congress on Feb. 12 as part of a Popular Legislative Initiative (ILP).

“This is a law to protect the banks,” Sara Vázquez, a lawyer with the PAH chapter in the southern city of Málaga, told IPS. “The public institutions have been taken hostage.”

The social movement accuses the government of distorting the ILP, which also called for a moratorium on evictions and the conversion of vacant housing in the hands of banks into affordable rental units.

The National Statistics Institute reports that there are 3.4 million vacant housing units in Spain – nearly 14 percent of all housing – and that most of these units are owned by banks.

Evictions totalled 363,000 between 2008 and 2012, according to a report released by PAH in January.

The new law delays eviction for two years for low-income families who meet certain standards of vulnerability. It also forces banks to renegotiate the debt and agree to a discount of 35 percent if the homeowners pay off the loan in five years and 20 percent if they do so in 10 years.

But Vázquez said that “paying 65 percent of the debt in five years starting from the original date set for repossession is impossible for nearly all of the affected families.”

“The PP disappoints people and is not living up to what citizens are demanding when it approves a law that distorts the demands of the ILP,” PAH national spokeswoman Ada Colau told a public radio station. She said the bill “excludes most victims.”

But the government of Prime Minister Mariano Rajoy said it was “very satisfied” with the bill. After the vote in the lower house, Vicente Martínez, PP legislative spokesman on the economy, said the new law “was designed looking into the eyes of thousands of people…whose living conditions will now be improved.”

Vázquez, however, said banks in Spain “take advantage of the repossession procedure, which is illegal according to the European court ruling,” and has been “since 1993, when the EU consumer protection law was passed.”

Who is wondering about what has happened to the hundreds of thousands of families who have been evicted over the past few years without a chance to defend themselves from unfair terms in their mortgage contracts? she asked.

“Most of the evicted families in Spain signed unfair contract clauses,” said Vázquez, who described the chaos in the courts as “hell” because, in light of the European ruling, all of the evicted families should have the right to demand reparations from the state for damages.

Meanwhile, judges have begun to apply the European Court of Justice ruling.

“Given the government’s failure to act, judges are moving ahead of the legislators,” José Cosín, a lawyer and activist with PAH Málaga, told IPS. He described the law as “a bandage on a mortal wound in the aorta.”

Judges in Málaga agreed Friday Apr. 19 to halt evictions in cases where unfair contract clauses have been found. The judiciary has set a May 8 deadline for courts nationwide to come up with unified criteria to apply the European Court of Justice verdict.

To foment the conversion of vacant housing to rental units, the government of the southern autonomous community of Andalusía, where Málaga province is located, approved a decree- law on Apr. 9 that slaps fines on banks, companies and individuals who do not release empty units for rent.

The decree-law also makes it possible to expropriate, for up to three years, housing units in the process of being repossessed, in the case of poor families who will be left in the street.

Of the 17 autonomous communities that make up Spain, Andalusía, governed by the opposition Spanish Socialist Workers Party (PSOE), has the second largest number of evictions, after Valencia in the east. Unemployment in Andalusía stands at nearly 36 percent, far above the national average.

Protesters in Málaga demonstrating against foreclosures. Credit: Inés Benítez/IPS

By Inés Benítez
MÁLAGA, Spain , Oct 25 2012 (IPS)

Shouting slogans against bank foreclosures, dozens of protesters in this southern Spanish city gathered Wednesday to prevent the eviction of a Moroccan family who couldn’t afford to meet their mortgage payments.

“I lost my construction job and I have two small children,” the head of this immigrant family, who gave his name as Mohammed, told IPS outside the house he began making payments on in 2007 in the Málaga neighbourhood of La Palma.

About a hundred neighbours and members of the Platform of People Affected by Mortgages (PAH) gathered for hours in front of Mohammed’s family home, in spite of Wednesday’s heavy rain, to keep out the justice system authorities in charge of the foreclosure.

Thousands of immigrant and Spanish families are in the same situation as a result of the severe economic crisis, which has driven up unemployment to the highest level in Europe, depressed wages, and prompted a raft of austerity measures introduced by the government of Prime Minister Mariano Rajoy of the rightwing People’s Party.

A total of 29,275 evictions were carried out between April and June – a record for this country, according to a report on the impact of the crisis on the judicial branch, published Sept. 2 by the General Council of the Judiciary.

The official figures indicate that the Spanish justice system foreclosed on 271,570 homes because of default on mortgage payments between 2007, when the crisis began, and 2010.

“This is a very harsh war,” Antonio Alarcón, an activist with the Málaga PAH, told IPS. He said Spain “is in a state of housing emergency, with many families living in dreadful conditions in garages, garrets and shacks,” while others face imminent eviction.

But at the same time, there are over five million vacant dwellings, equivalent to 20 percent of the country’s housing stock, according to housing experts. The National Institute of Statistics recorded 3.1 million uninhabited housing units in 2001, but will only update its figures in early 2013.

According to the newspaper El País, the General Council of the Judiciary this month studied a report by six magistrates which accused banks of “malpractice” for granting mortgages “without evaluating the borrower’s real ability to pay,” demanded a moratorium on mortgage payments, and called for government bank bailout funds to be extended to the financial institutions’ indebted clients.

The growth of unemployment, which has reached 24.6 percent, has caused growing numbers of mortgage-holders to default on their payments and to be evicted. And in spite of being on the street, they are still liable to the banks for the outstanding debt.

“Where will they go with their children? We need a solution, a job so that we can pay,” a female relative of Mohammed’s wife told IPS on the brink of tears, while her husband, Abdesselan, complained that they were deceived because they took out a mortgage for 117,000 euros (151,758 dollars) when the title deed states the value of the apartment is only 70,000 euros (116,754 dollars).

“Let’s form a human chain of passive, peaceful resistance. We’re here to protect a home and a family. We are human beings,” Sara Vázquez, a Málaga PAH spokeswoman, exhorted the neighbours shortly before the time set for the eviction, which in the end was suspended without a new date set, IPS was told.

“It is the neighbours who are stopping the evictions,” said Alarcón, who complained about the lack of effectiveness of the foreclosure mediation programme launched by the government in recent months, whose offices have not been able to solve cases like that of Mohammed’s family.

PAH lawyer José Cosín told IPS that foreclosures can be stopped or delayed by means of “frontal and physical” opposition by civil society, organised in groups like the May 15 Movement (15M), which arose from spontaneous mass demonstrations in the central squares of Spain’s large cities on that date in 2011.

PAH, formed in Barcelona in 1994 as an association of people affected by mortgage debt, has joined with other social organisations and with trade unions to promote a so-called Popular Legislative Initiative, which would make it possible for mortgage-holders to give up a house in full payment for the debt, request a moratorium on mortgages and convert them to affordable rents.

The Rajoy administration will face its second general strike in protest against the cuts in less than a year of government on Nov. 14. In February it announced a “code of good practice” on giving up houses in full payment – known as “dación en pago” – that was merely a declaration of intent and not binding on the banks.

The proposal, according to Cosín, “was not worth the paper it was written on,” as it left it up to the banks to accept or not the return of the houses, or to negotiate affordable rent payments.

“Our weapons (against evictions) are our voices and our hands,” one of Mohammed’s neighbours shouted through a loudspeaker, surrounded by signs reading “Indignation” and “Can’t Pay, Not Won’t Pay.”

In late 2010 there were 687,523 new housing units in Spain that lacked buyers, according to a July 2011 report by the Ministry of Public Works. Meanwhile, evictions are growing exponentially.

Cosín believes solutions exist, and he gave the example of Miguel, an unemployed bricklayer who was squatting in a decrepit house in Málaga, but signed an agreement on Oct. 12 with José, the owner, which allows him to live in the house temporarily in return for renovating it so it can be sold.

“This is a solution in a society where there are millions of empty houses that are depreciating and thousands of people without a home,” said Cosín, who proposed the formula that suited both parties when he received José’s lawsuit against Miguel.

José will receive a pre-arranged sum of money when the house is sold, and the difference between this amount and the final value will be used to buy another dilapidated house for restoration, said Cosín, who is also a 15M activist.

A bill on Urban Rents before the Spanish parliament includes a contract on “restoration in lieu of rent,” regulating the opportunity for the tenant to restore the property instead of paying rent.

Governments should promote alternatives to housing policy based on credit and property, among other things by means of developing a private rental sector, Raquel Rolnik, United Nations Special Rapporteur for the right to adequate housing, said in a report presented to the U.N. General Assembly.

In the wake of the epidemic of home foreclosures, banking scandals and resulting massive financial regulation overhaul two years ago known as the Dodd-Frank legislation, the U.S. government created a new federal agency to protect consumers from being taken advantage of by banks and other institutions.

Robert Moses, 92, faces foreclosure on his home. He recently participated in an Occupy movement rally in San Francisco demanding justice for mortgage and debt holders. Credit: Judith Scherr/IPS

Known as the Consumer Financial Protection Bureau (CFPB), it’s operated for a year now, with mixed results, according to civil society groups that follow the issue.

“Obviously, the agency’s been stifled somewhat by Congress,” Jamie Court, president of the non-profit California-based group Consumer Watchdog, told IPS. “Given the scrutiny they face, and the budget limitations, they’ve done a good job of starting to break new ground on mortgage regulations and financial services regulations, disclosure for consumers.”

Republicans, particularly in the U.S. House of Representatives, have been vehemently opposed to the CFPB.

“It’s a very tough job in this political and budgetary climate. They’ve done a good job of letting the public know their doors are open. The question is, how responsive they are to petitions from the public, and how much can they do as quickly as possible?” Court said.

“They have a good staff that understands consumer protection. The real fate of the agency will be determined by the (November U.S. presidential) election. The election is really a mandate for this agency to go forward or not,” he said.

Republican nominee Mitt Romney opposes the CFPB, while President Barack Obama, the Democratic nominee, supports it.

The CFPB is “pretty much what Obama got for the consumer out of financial reform, which was too little. It’s the first time we have a federal agency that’s there to protect consumer, not the bank, not the investor,” Court said.

Over the past weekend, the agency announced its second enforcement action in conjunction with the Federal Deposit Insurance Corporation (FDIC), ordering Discover Bank to refund approximately 200 million dollars to more than 3.5 million consumers and pay a 14-million-dollar civil penalty.

At issue were “deceptive telemarketing and sales tactics used by Discover to mislead consumers into paying for various credit card ‘add-on products’ – payment protection, credit score tracking, identity theft protection, and wallet protection,” according to an agency press release.

According to the CFPB, Discover Bank, one of the largest credit card issuers in the U.S., misled customers about whether there was a cost for the products, enrolled customers without their consent, and failed to tell customers about some of the eligibility requirements associated with payment protection benefits.

In a similar case of “deceptive marketing tactics”, on Jul. 18, the agency announced its first enforcement action, requiring Capital One Bank to refund approximately 140 million dollars to two million customers and pay an additional 25-million-dollar civil penalty.

On Aug. 10, the agency proposed two new rules that will protect families who take out mortgages for their homes. These proposed rules are currently subject to a public comment period before final action will be taken.

The agency has also been collecting hundreds of comments from U.S. consumers regarding various complaints each week, and is encouraging consumers to submit complaints to the agency, including on its website.

“They’re being judicious in what they’re setting out to do. They’re not being a lightening rod for controversy – they’re doing sensible things on a sensible timeline. We’re very pleased by their agenda,” Linda Sherry, director of national priorities for Consumer Action, a San Francisco-based national consumer education and advocacy group, told IPS.

One of the benefits of the CFPB is that it gives U.S. consumers a single place to seek help with complaints regarding banking products and other financial products, Sherry said.

Previously, there were “too many cooks in the kitchen”, she said.

“This brings everything under the same roof. It’s easier for consumers to know who to go to for help. Beforehand, there were seven different agencies engaged in regulating the banking system,” she said.

Those agencies included the Board of Governors of the Federal Reserve, U.S. Department of Housing and Urban Development, FDIC, Federal Trade Commission (FTC), National Credit Union Administration, Office of the Comptroller of the Currency (OCC), and Office of Thrift Supervision.

The FTC, for example, would look for trends in the credit industry and credit reporting industry, sometimes bringing legal actions in conjunction with the U.S. Department of Justice. However, they would not respond to individual complaints.

“As far as banking complaints, any banks that were national banks were (previously only) regulated by the OCC. They had robust consumer complaint unit. However, what would come back to us many times, they (a consumer) would submit a complaint, it would be sent for review and it would come back,” Sherry said.

“The OCC would write a letter saying, ‘The bank doesn’t see there’s a problem. We can’t do anything,’” she said.

“Financial services are key to a person’s well-being, livelihood, and prosperity. We want to keep people from being ripped off. That’s why we’re very pleased to have a new national consumer watchdog on the beat,” she said.

Court believes that the CFPB should be acting more aggressively.

“It also has to start banning certain types of products because they’re dangerous. There are some obscene interest rates on credit cards being charged, also payday lending, a lot of toxic financial products. They’re going to be asked to deal with these by petition,” Court said.

“The real test of the agency will be what it does when presented with toxic products,” Court said.

Court applauded the recent enforcement actions against Citibank and Discover Bank. “It’s a great example. An agency can step in and get 200 million dollars back to consumers’ pockets. Before that you had to file a class action lawsuit,” he said.

Meanwhile, Elizabeth Warren, a Harvard Law School professor who came up with the idea for the agency, and who worked with interest groups and the U.S. Congress to bring the agency into fruition, also praised the Discover Bank action.

“I’m proud the Consumer Financial Protection Bureau is standing up for working families by holding major credit card companies accountable for deceptive practices,” Warren, who is currently the Democratic nominee for a U.S. Senate seat in Massachusetts, said in a statement sent to IPS.

“The new consumer agency is a strong advocate for hardworking men and women here in Massachusetts and across the country. The CFPB has been hard at work reducing the fine print in credit card agreements and assisting with consumer complaints… These actions will help protect families from financial tricks and traps and create a level playing field,” Warren said.