A new report from Moody’s Investor Service shines light on the record rise in home repossessions in Spain.
The credit crunch and rising unemployment have driven home repossessions to a record level, reveals the report.
There were 27,561 repossessions procedures in the first quarter of this year alone, an all time record for Spain, following on from an increase of 126% in 2008 and 59% in 2009.
The number of properties repossessed likely to be considerably higher, as repossession procedures often involve more than one property. When a bank repossess from a developer, dozens of homes can be involved.
Banks now have 20.5 billion Euros of repossessed property on their books.
Rising repossessions have overwhelmed commercial courts in some areas, meaning it can now take up to 2 years to foreclose against a background of falling property prices. That creates extra problems for bank liquidity and the value of Spain’s mortgage-backed security.
All of which suggests that the number of repossessions coming on the market will keep growing, whilst prices keep falling.