Bad housing mortgages on the fall

While some skepticism is still necessary, the real estate sector has entered a small truce with the banks. Home mortgage defaults have fallen, and the five major banks in Spain (Santander, BBVA, La Caixa, Sabadell and Popular) have trimmed their number of defaulted mortgage loans by 2% to 9.5% in the first quarter of this year.

They have also put the brakes on real estate developers with unsure solvency. A slight uptick in the economy and an improved housing market could help a business sector that has cost the banks 200 billion euros in provisions. With an improved climate, the banks could restore their traditional business model little by little and start lending money to small businesses and families.