• Most of it is concentrated in Andalusia and Catalonia, followed by the Valencian Community.
  • In 594 cases the debt was restructured and in 298 the payment was agreed.

A total of 4,385 mortgage debtors have applied to benefit from the Code of Good Practice (CBP) during the first year of operation. The petitions have been filed with 27 banks and 19 credit unions and the outstanding debt reaches 582.7 million euros. Of the 4,385 applications, 1,063 were pending processing at the end of the first quarter of 2013 (24% of the total). Of the 3,322 already processed, in 594 cases the debt was restructured, another 298 ended up in payment, 238 withdrew, 2 with withdrawal and 2,190 were denied for not meeting the requirements.

The CBP was launched in April 2012 and currently has 97 member entities, almost all of which have mortgage activity in Spain. Its objective is to protect debtors who cannot cope with the mortgage payment as a consequence of the crisis. The CBP allows the debtor to restructure the debt, set a write-off and, ultimately, the payment in payment. Adherence to CBP is voluntary by financial institutions, but once it is completed, compliance is mandatory for a period of two years.

During this first year of operation, applications to join CBP have been increasing at a strong rate. In the second quarter of 2012, 564 applications were received, 722 in the third, 1,132 in the fourth and 1,967 in the first of 2013 (more than 44.8% of the total). Of the total accumulated in this first year, most of the requests have been made in Andalusia (1,156), Catalonia (1,028), the Valencian Community (755), Madrid (364) and Murcia (315). These five communities concentrate 82.51% of the total requests. By provinces, the one that concentrates the most is Barcelona (809) and the one that least concentrates, Huesca (1).

As for the resolution of the requests processed at the end of the first quarter of this year, 2,190 were denied and 894 made. In 238 other cases, the debtor gave up, but the causes cannot be determined. In 594 cases (66.4% of the resolved cases and 17.88% of the processed cases) the debt was restructured. In 298 cases (33.3% and 8.97%, respectively) the payment was agreed and the consequent cancellation of the debt. In two cases a withdrawal was agreed.

The denials responded that the loan or credit did not meet the requirements established in the norm (45%), failure to deliver the documentation (29.4%) or non-compliance with the income thresholds or family situation to qualify (21.55 %). These thresholds have been raised in the amendment that has just been approved by the Senate and will take effect in the coming days. For example, the level of family income to qualify for CBP is raised up to three times the IPREM (1,597.53 euros per month), the value of the mortgage (between 240,000 and 400,000 euros depending on the number of inhabitants of the city where the property), among other improvements. With these measures, it is expected that the number of denials will drop significantly already in the next quarter.

Taking into account, on the other hand, that in 2012 there were 2,405 judicial deliveries of occupied housing, according to data published on May 10 by the Bank of Spain, it can be concluded that the CBP, with 1,134 applications accepted, is an instrument Useful for mortgage debtors who are on the threshold of foreclosure and have difficulty coping with the payment of their debt.

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