Spanish Land Registry and the Secondary Market

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Spanish Land Registry and the Secondary Market

• Isabel González García
• Land Registrar

Experiences with data management to improve land
administration in ECE countries Sofia, 23-24
april, 2009
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• In the European Securitisation Forum Autumn
  2007, reports ranking of European securitisation
  issuances by country of collateral, the Spanish
  securitisation market had consolidated its second
  place position, and that is due to the strong
  position in the residential mortgaged-backed
  security sector.

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Spains Mortgage Market

• Different types of lenders offering a great
  variety of mortgages, Banks and Saving banks
  (Cajas de Ahorro).
• There is a high need for the mortgage funding,
  due to the preference of acquiring a dwelling in
  property than renting.
• The legal framework for this is the Spanish
  mortgage market law according to article 47 of
  the Spanish Constitution, which establishes the
  right to access a dwelling.

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RegulationSpanish mortgage market law(25th
March 1981)Law 41/2007 7th December
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Mortgages types

• Variable rate European Central Bank index is the
  most commonly used-.
• Fixed rate. The interest rate does not vary
  throughout the lifetime of the mortgage.

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Lending Institutions and Appraisal Firms.-

• The lending Institutions offer different types of
  credits and loans.
• Those loans are covered by mortgages that act
  as guarantee.
• Lending Institutions can go for refinancing by
  issueing two types of bonds
• Covered bonds
• Mortgage bonds

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Covered bonds

• Guaranteed by the mortgage portfolio of the
  issueing entity except by those that cover the
  mortgage bonds-
• Do not need special registration
• Any mortgage registered at the time

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• Mortgage bonds
• Guaranteed by the mortgage specially mentioned on
  the deed.
• Do not need special registration.

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Appraisal firms

• They become the key in order to ensure the loans
  and credits are adjusted to the value of the
  property that serves as a guarantee.
• These companies are submitted to very strict
  regulation to saveguard their indepence.
• When the lending credit institution has issued
  bonds and has a rating company of its own, they
  must create a technical commission to verify
  their acting.

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Secondary Market
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New times, new legislation

• Development of the mortgage bond market
• More flexibility to the issuers of
  mortgage-related securities.
• Improvement in the legal position of the holders
  of those bonds.

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Aims.-

• To preserve the importance of a strong mortgage
  market.
• Legal developments that modernise the regulatory
  framework for mortgages.
• More flexibility in the means of refinancing for
  the Spanish financial institutions.
• Wider range of mortgage-related products.

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Other innovations

• Larger mortgage portfolio not only real state
  assets located in Spain, but also in the
  territory of the European Union.
• Liquid assets the issuance may be backed by
  certain types of low risk and high liquidity
  fixed income securities, the so called
  replacement assets.
• More investors
• Additional use of the funds

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Thank you very much for your attention!