From the Housing Bubble to Mortgage Repossessions

Abstract

One of the most pressing problems of the national and international scene is, in addition to the global crisis and unemployment, the phenomenon of foreclosures and repossessions (auctions) for nonpayment. Since the outbreak of the international financial crisis following the bankruptcy of Lehman Brothers, many crises and dramatic phenomena have spread, some directly related with the developments of the financial system and others due to the general decline of real economies. However, the truth is that the Western world has entered into a crisis, and in fact diverse bubbles were developing simultaneously in different countries with identical profile, but with nuances, in a common global context. First of all, this article deals with the economic boom and the housing bubble that occurred in the Western world; secondly, it analyses the different aspects of the real estate and credit bubble in Spain. Third, it analyses the evolution of mortgage repossessions after the bust of the housing bubble, and in the fourth and last place, the responses of citizens and institutions that were taken during the current crisis.