My understanding is that in America, if the bank evicts you because you have fallen behind on your mortgage, then they are exchanging the mortgage obligation for the collateral (the house). Thus, if you are evicted, then you are no longer obligated to the mortgage agreement.
What kind of mortgage agreements are they signing in Spain?
You are speaking of "non recourse" mortgages. Most states do work this way--if you hand in the keys, you're done with the house and the obligation, although it will affect your future credit rating. However, as a quick search shows, not all states have this legal feature.
“My understanding is that in America, if the bank evicts you because you have fallen behind on your mortgage, then they are exchanging the mortgage obligation for the collateral (the house). Thus, if you are evicted, then you are no longer obligated to the mortgage agreement.”
It depends on the state. In some states, like CA and AZ, once your mortgage is foreclosed they get the house and that’s it. In other states like VA, you are still liable for the difference between whatever the house sells for and the mortgage. For example, let’s say that a house has a $180,000 mortgage, it’s foreclosed upon, and then sells for $100,000 at the foreclosure auction. The debtor would be liable for the $80,000 difference. As a practical matter though, it’s difficult to squeeze blood from a stone and most banks don’t aggressively pursue it: if they do, step 2 is that the person just goes bankrupt and the $80,000 difference is discharged in bankruptcy anyway.
In Spain it looks like they don’t have the concept of personal bankruptcy, so the bank pursues the difference aggressively.
> My understanding is that in America, if the bank evicts you because you have fallen behind on your mortgage, then they are exchanging the mortgage obligation for the collateral (the house). Thus, if you are evicted, then you are no longer obligated to the mortgage agreement.
Basically they steal all your equity unless you are able to sell it first. Reminds me of a crooked car dealer I worked on a longgg time ago that would sell cars, change the payment date so that it was always behind, then repossess the same vehicles and resell them again many times over making a LOT more profit. He finally got busted enough times that he ended up in jail and lot his car dealership.