A/67/286 open system of mortgages, based on sub-prime loans, easily granted credit and the financialization of mortgages, have seen a serious crisis since 2008, when the financial crisis in the United States spread internationally. In previous reports (A/HRC/7/16/Add.2, A/HRC/10/7, A/HRC/13/20/Add.4 and A/HRC/16/42/Add.3), the Special Rapporteur analysed at length the impact of mortgage market liberalization and the sub-prime mortgage system on the economic and financial crises in various regions and the subsequent devastating impacts of the crises on the most poor and marginalized. 29. The discrepancy between income levels and soaring housing and rental prices coupled with unemployment led to increased payment default, foreclosures and homelessness. These processes were exacerbated by the adoption of legal and institutional adjustments aimed at facilitating foreclosure, which have been promoted in recent years as “imperatives for developing a housing finance system”. 39 The paradigm that promoted homeownership as the most secure form of tenure has been proven false, as increasing foreclosure rates have been one of the main results of the recent crises. 40 In Spain, more than 350,000 foreclosures have occurred since 2007 and in 2011, about 212 foreclosures and 159 evictions occurred daily. 41 The crisis has disproportionately affected the poorest and most vulnerable, who were the “last” to join the mortgage markets and the first to suffer the consequences of the crises owing to their low resilience to economic shocks and low repayment abilities. 42 Recent research indicates that the majority (70 per cent) of defaults in Spain are related to the unemployment crisis and that 35 per cent of the foreclosed properties belong to migrants. 43 30. The effect of the housing crisis has been less detrimental for emerging economies where, owing to their structure and performance, mortgage markets remain smaller, more conservative and less connected to capital market flows. Emerging mortgage markets that have made heaviest use of global securitization (e.g. the Russian Federation, Kazakhstan and the Republic of Korea) were most affected. 44 In Kazakhstan in 2010, more than 40,000 borrowers were waiting for their apartments to be finished while construction companies went bankrupt (see A/HRC/16/42/Add.3). 31. In Eastern Europe, an aggravating factor has been the high rate of foreign currency-denomination loans in some of the countries in the region. In 2010, 42 per cent of mortgages in emerging Europe were denominated in a foreign currency. 45 By the time the economic crisis hit, some two thirds of all mortgage loans in Hungary were in Swiss francs. With the onset of the crises, the value of the franc escalated against the Eastern European currencies. Homeowners suddenly found __________________ 39 40 41 42 43 44 45 10 World Bank, Housing Finance Policy in Emerging Markets, pp. 94-95. According to the RealtyTrac, a company that maintains a database of foreclosures, in the third quarter of 2009 foreclosures were filed for 1 in every 136 housing units in the United States. A. Colau and A. Alemany, Vidas Hipotecadas (Barcelona, Angle Editoriál-Cuadrilátero Libros, 2012), pp. 21-22. Committee on Economic, Social and Cultural Rights, concluding observations on Spain (E/C.12/ESP/CO/5), para. 21; Amnesty International, Spain: Submission to the UN Committee on Economic, Social and Cultural Rights, 48th session, May 2012, AI index EUR 41/005/2012 (London, 2012). Colau and Alemany, pp. 30 and 237. World Bank, Housing Finance Policy in Emerging Markets, p. xxxvii. European Bank for Reconstruction and Development, p. 56. 12-45918