The bursting of the real estate bubble, which triggered credit delinquencies, used a change in the protocols of financial institutions in the face of a delay in the payment of installments by mortgage debtors. Thus, apart from the fact that the entities have signed the Code of Good Practices for vulnerable customers, both the 2012 code and the one aimed at rescuing middle-class mortgagees, they are in charge of offering solutions for those customers who are left out. of these shields.
Precisely, the CEO of Banco Sabadell, César González-Bueno, admitted, during the press conference to present the results, that the bank is showing special sensitivity to clients with problems and is offering them different solutions. “We treat case by case,” explained the manager, who also stressed that this also “defends the interests of the entity because the bank is not interested in the customer losing their home, nor is it convenient for them to keep it.”
Other entities also presented that they are following these protocols, with multiple alternatives. One of them may be to offer the home to another interested client, so that the debt can be paid. With the money obtained, the mortgaged person can pay the outstanding balances and at the same time receive some money that allows him to face a cheaper purchase or opt for rent.
This is just one example and other solutions -for all clients and not only for those protected by the Codes of Good Practice- are very similar to those agreed for vulnerable or at-risk groups. From refinancing, looking for better conditions, going through moratoriums, in which it is allowed to request the deferral of the mortgage payment, which includes both interest and capital, going through applying deficiencies in the loan. In the latter case, the payment of interest, capital or both is deferred. Although in any case, it is the bank, upon request, who studies and analyzes it. In this sense, González-Bueno reiterated this Thursday that “any circumstance of someone with payment difficulties is attended to regardless of whether or not they fall under the umbrella designed by the Executive.”
A different scenario from the financial crisis
However, the bank also recognizes that it is not even close to the scenario of the real estate crisis, since it recalls that the new mortgage production of the last two years has been made, mainly, at a fixed rate. The latest statistical bulletin from the Spanish Mortgage Association (AHE) shows that the growing trend that this type of credit has been registering for more than five years is continuing. “Thus, we see that fixed-rate loans have come to be around 8 points above the proportion affected a year earlier, since they specifically represent 29.5% of the balance in force as of June 2022. This movement shows a behavior of prudence and risk aversion on the part of consumers supported by the very favorable financial conditions of recent years, ”the organization points out.
Also, and after the previous financial crisis, there was a change in the ‘loan to value’ of mortgage financing operations by banks. According to the AHE, “the trend shows greater rigor in risk policies as the years progress, also partly favored by the expansive real estate cycle of recent years. Thus, in the second quarter of 2022 (last published report) only 10% of the balance in the portfolio was made up of operations with an LTV greater than 80%, almost 2 points less than with respect to the same period of the previous year and more than 3 less. that makes a glow.”
Change of sensitivity for banking
Financial sources acknowledge that behind these initiatives there has also been an internal evolution, in which many of the ways in which they acted before the awareness process that produced the financial crisis have changed. In 2012 alone, and according to data from the Bank of Spain, 32,490 homes were handed over, of which 43% resulted through dation in lieu of payment (just over 14,000 homes), while judicial deliveries exceeded 14,000.
Regarding the measures included in the Codes of Good Practices, they range from a 5-year grace period, debt relief and dation in payment for those mortgaged with incomes below 25,200 euros. For debtors of measured classes, with income of up to 29,400, the change of mortgage from variable to fixed rate is also contemplated.