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Home foreclosures fall by 31% in the first quarter of the year

Foreclosures have decreased by 31% so far in the first quarter of the year. Foreclosures have affected less than 3,700 homes, according to data released Friday by the National Statistics Institute (INE). The data released have resulted in a 31.1% drop compared to the same period last year. Referring to the total data, it is the third lowest figure since the first statistics were published in 2014.

The statistics had only declined in volume during the summer of last year and the second quarter of 2020, when the pandemic brought all courts and registries to a standstill.

Foreclosure certifications are the moment in which the Land Registry is aware of the lender's intention to repossess the property in the event of non-payment by the borrower. It does not always mean that there will be an eviction, since in the process it is possible to reach a negotiation between both parties.

It should be taken into account that in Spain most evictions are not due to mortgage problems, but to tenants who lose their homes due to non-payment of rent.

According to the general information, foreclosures of regular homes are the ones that show the greatest resistance to fall. However, with 2,543 certifications, they are down 25% compared to the results of a year ago, which shows the lack of impact on defaults due to the rise in the Euribor and the increase in the cost of variable loans.

It should be remembered that in order to avoid the situations of the 2008 crisis, a legal effect was introduced in the 2019 mortgage law requiring a minimum default of 12 months (depending on the outstanding amount and maturity of the loan), which produced a rise in foreclosures after the pandemic.

The INE records 587 foreclosures of other homes (excluding the primary residence), such as second homes or any home that is not used as a primary residence. This means a decrease of 27% less than last year. With respect to the homes of legal entities, the number of foreclosures fell by more than 51% to 563 operations.

The communities with the highest number of home foreclosures are Andalusia (1,034), Catalonia (847) and the Valencian Community (703). The opposite is the case in Navarra and La Rioja, where barely 15 were certified; 25 in Cantabria and 27 in the Basque Country.

It is necessary to mention that mortgages on other properties have fallen in important percentages. Those on plots of land have dropped by 40%, urban properties by 57%, and rural properties by 34%. But nothing like the volume of mortgages on homes, which account for three out of every four foreclosures. Of these, 7 out of 10 are of homes with mortgages from 2008 or earlier. A demonstration of the great wound caused by the bursting of the real estate bubble in Spain that year.