The eviction of 87-year-old Maricarmen Abascal from an apartment in Madrid set off political turmoil in Spain that has left non-performing loan investors unsure how to price Spanish portfolios, as legislators debate whether to turn an emergency housing decree into a long-lasting law.
The landlord who evicted Abascal was not an NPL investor and had not bought the property from one. Market participants say that NPL investors already follow good practice by keeping vulnerable borrowers out of the portfolios they buy and preferring to settle with borrowers rather than foreclose.
Nevertheless, NPL investors are grappling with the consequences after the government quickly tightened protections for tenants and introduced new ones for mortgage borrowers, which will stay in force only if the decree wins a vote on 12 November.
Abascal was a long-term tenant, not a defaulted mortgage borrower, and had lived in the apartment in Madrid’s Retiro district since 1956 on a so-called “old-rent” (renta antigua) contract her father originally signed. Under that lease, she paid about €500 a month until Urbagestión, a Madrid property company that bought the flat, sought to raise the rent to €2,650 and won its case against her in the Supreme...
