LA DEFENSA DEL DEUDOR HIPOTECARIO Y EL ÁMBITO DE APLICACIÓN DEL REAL DECRETO-LEY 6/2012.

Abstract

Legislative measures have recently been taken to favour mortgage borrowers, for example, by increasing the assets that are privileged from execution and by amending the Civil Procedure Act, articles 671 (award to the lender in the event of auction without bidders) and 579 (relationship between foreclosure on mortgaged collateral and subsequent foreclosure on all the debtor's assets). These measures are discussed, paying particular attention to the realm of application of Royal Decree-Law 6/2012 of 9 March and the measures it contains (mortgage debt restructuring through moderation of interest on late payment and the Good Practice Code, modification of the extrajudicial foreclosure procedure, and access to rental property for evictees eligible for mortgage foreclosure flexibility measures). After detailed study, the conclusion is reached that the legislative measures taken are insufficient and means must be sought to defend mortgage borrowers in foreclosure proceedings of both types, if the sum yielded in foreclosure is insufficient to discharge the debt. One proposal calls for the courts to moderate the rule of unlimited personal liability at the most appropriate point in proceedings (when awarding a debtor's permanent residence to the mortgage lender in an auction without bidders; when deciding whether or not to admit subsequent foreclosure on all the debtor's assets; when the debtor objects to subsequent foreclosure on all his assets). In either case, the point would be to restrict subsequent foreclosure proceedings so as to allow the lender to claim only whatever portion of the debt (sum of principal, interest [compensatory interest and interest on late payment, with moderation of both or at least the latter] and costs) remains after subtracting 100% of the property's initial appraised value as awarded to the lender. Arguments are furnished, based on the leeway courts are allowed by current legislation, showing how judicial decisions moderating the rule of unlimited personal liability do have grounds in law and do not clash with current legislation. This, in consideration of the fair application of the law, the application of clausula rebus sic stantibus, legal thought on estoppel, the prohibition of abuse of process, consumer protection and the shifting of the risk of property depreciation onto the lender (as the lender accepts this risk voluntarily at the conclusion of the mortgage agreement). An interpretation such as the one advocated here, and the legal acceptance of limited-liability mortgages (or mandatory acceptance by the lender of surrender in lieu of payment), would pose certain advantages and disadvantages for Spain's legal and economic situation. These pros and cons are examined. Lastly, there is mention of other possibilities open to mortgage borrowers under Spanish law. These include setting aside mortgage foreclosure, mediation to restructure the debt, partial acquittance, surrender in lieu of payment to avoid foreclosure and surrender in lieu of payment to creditors in personal bankruptcy proceedings.