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Spain parties tackle eviction reform after suicides

A member of the Mortgage Victims' Platform (PAH) rests as they stage a sit-in protest inside a branch of nationalized lender Bankia in Madri
A member of the Mortgage Victims' Platform (PAH) rests as they stage a sit-in protest inside a branch of nationalized lender Bankia in Madri

By Nigel Davies

MADRID (Reuters) - Spain's top parties will tackle eviction law reform on Monday after a homeowner's suicide provoked public fury and accusations that politicians and banks are complicit in de facto "murder".

Close to 400,000 Spaniards have lost their homes since a property bubble burst in 2008 and the nation subsequently sank into recession, throwing millions out of work and unable to keep up mortgage payments to the banks.

However, the suicide of 53-year-old Amaia Egana has inflamed a public already angered by what they see as a lack of compassion among Spanish banks, many of which have benefited from taxpayer-funded bailouts organized by the political elite.

Egana, a former Socialist councilor in northern Spain, jumped to her death from her fourth-storey flat on Friday as bailiffs were trying to evict her under foreclosure laws.

Public pressure prompted Prime Minister Mariano Rajoy to call for officials from his conservative People's Party and the opposition Socialists to speed up talks on reforming the eviction laws when they meet on Monday.

Fans at a Primera Liga soccer match on Saturday protested about the fate of Egana, who killed herself in the Basque town of Barakaldo, and countless others who are losing their homes.

"They're not suicides. They're murders. The banks and politicians are accomplices. Stop the evictions!" read a banner held up by supporters of Rayo Vallecano, which plays in a working class district of Madrid.

Heads of the economy departments of both parties were expected to look at the possibility of granting moratoriums on mortgage payments for families in dire straits and to change the legal proceedings that lead up to an eviction.

Egana's death, and another eviction-related suicide in October, have intensified a popular backlash with many accusing the banks - some of which have received part of an up to 100 billion euro European bailout - of callous disregard for the effects of unemployment, which has hit 25 percent.

However, a number of banks themselves are in dire straits because of the failure of many borrowers, ranging from small homeowners to major property developers, to repay their debts.

DESPERATE HOMEOWNERS

In the Basque Country, where Egana killed herself, other worried homeowners fear they too will be evicted soon.

"I am depressed, I feel bad, I can't sleep at night," said Fabian Herrera, an Ecuadorean immigrant. "I wake up and go back to bed only thinking that tomorrow it might be us who have to leave our home and return it to the bank, and where are we going to live?" Herrera and his wife are out of work and have stopped paying their mortgage.

As property prices have tumbled about 30 percent, hundreds of thousands of people who took on huge mortgages during the boom years now owe more than their apartment or house is worth.

Under Spanish law, even when borrowers turn over their homes to the bank, they still owe the entire amount of the mortgage.

A citizens' movement called "Stop Evictions" has campaigned for more than a year, organizing protests outside apartment buildings to block court workers from evicting families.

The pressure by Stop Evictions and other groups led the government to ask banks earlier this year to forgive mortgage debt for properties worth less than 200,000 euros and where all family members are unemployed. But consumer groups say the voluntary code of ethics for banks did not go far enough.

A group of top judges has pushed for a cross-party agreement on eviction reform, and a police union said it will support officers who refuse to take part in an eviction.

On Saturday northern Spanish mortgage lender Kutxabank said it was suspending repossessions after the suicide of Egana.

Last week, European Union Advocate General Juliane Kokott issued a non-binding report concluding that Spanish legislation on evictions contradicts European norms for protecting consumer rights. Europe's highest court will deliver a ruling on the issue.

(Additional reporting by Marco Trujillo and Ibar Aibar; editing by Fiona Ortiz and David Stamp)

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