Tuesday, 19 April 2011

Debt arrears highest since 1995

SPAIN (Agencies) Debts in Spain have reached levels unknown since 1995. Un paid mortgages and loans given by banks, building societies, cooperatives and other financial establishments rose to 6.19% in February, against January's 6.06%. It is the fifth consecutive rise in the loan sector. According to preliminary figures from the Bank of Spain, the total debt in the Spanish financial system is €112,458 million to end of February, €1,769 more than in January. Current law classifies a loan as 'doubtful' when the title holder, private or a company, accumulates three consecutive months of non-payment. Another aspect of the law, in the process of change at present, is that even though a property may be returned to the financial entity that gave a loan on it, the debt is still outstanding until it is fully paid up, even if the property is sold by that entity, the monies obtained not being put against the loan. (We will be reporting on the change as soon as it changes.)

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