The pain in Spain is reaching the upper-class. Foreclosures has previously disproportionately affected lower-income immigrants but is now spreading to formerly well-to-do families, as Bloomberg Businessweek [5] notes that they are running out of ways to pay mortgages in a deepening recession. Home price drops are re-accelerating as "repossessions are encroaching further into the city centers, like an overflowing river."
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The path to this end sounds very familiar as "Bank managers, who had aggressive targets to meet, did all they could to lend to those who wanted to carry on buying into the bubble" and the saddest case of all as parental guarantors were used to spread the risk as "The kids lose their homes, go live with mom and dad and then mom and dad lose the home that they worked all their lives to pay for because it backed their children’s debts."
At the peak of the housing boom in 2007, purchasing a home in Spain cost 7.7 times a family’s annual gross income on average, compared with 5 times in the U.S. Labor market reforms, under Rajoy's austerity measures, making it cheaper to lay off traditionally secure workers are expected to accelerate defaults on retail mortgages. The situation is grave and summed up sadly "These people completely lose their purpose in life, everything they had or will ever have in the future will go to the bank."
(h/t @Not_Jim_Cramer)