The Spanish people are 169.3 billion euros behind on mortgage payments. This amount is 9.86% of all outstanding mortgages in the country. The construction industry, mostly due to real estate promoters, is yet again the root of the problem.
That said, the crisis has increased the number of families and small businesses not making payments on their property. Another factor has influence rising defaults, which saw a major jump in June and July: the second round of national banking reform and solvency tests carried out by the banks. Both measures uncovered debts that banks had been hiding under the rug.
If the fiasco ends when Spain builds a bad bank, we will finally be able to say that we have reached the limit, and that is the first step toward future growth.
