The long-awaited Real Estate Credit Contracts Act will come into effect on June 17. This regulation, which will govern our mortgage market and transposes a European directive, is very demanding for banks, especially during the information stage prior to the signing of the contract. The aim is to strengthen transparency in banking operations and, consequently, customer security. Furthermore, it entails significant changes to the early repayment and accelerated maturity of mortgages, which could have implications for market characteristics that are currently difficult to anticipate. It is expected, however, that the new regulation will increase legal certainty in the market, reduce judicial discrepancies, and help decrease the harmful litigation between customers and entities.
Banks are fully prepared both to comply with the changes implied by the new law—notably the adaptation of mortgage signing processes—and to guarantee their lending capacity and quality of customer service. The regulation introduces a significant information effort for both banks and notaries to ensure that the customer fully understands the characteristics of the contract. Banks trust that notaries will reliably and without limitations enable their system to allow for the timely handling of the documentation sent to them. They expect that both the training of notaries in the use of the system and their own platform will also be ready. Our entities, which are world leaders in digital transformation, are in a position to help other involved parties meet these higher technological demands. However, it is important that these actors recognize their weaknesses and seek collaboration.
Bank employees have always been and will continue to be essential for building the relationship of trust between entities and consumers; therefore, they require the necessary knowledge and competence to provide good service. The regulation brings new requirements regarding their training to reinforce branches as the first line of control for risk and the solvency of customers applying for a mortgage. Employees must strengthen the analysis of the customer’s repayment capacity, both present and future. With this in-depth study and the new information and transparency requirements, customer responsibility in signing the mortgage contract will be reinforced.
The high dynamism of the residential market is not only due to the reduction in unemployment and very favorable financing conditions. Above all, it reflects the deep-rooted culture of home ownership among Spanish families, which goes beyond a generational issue. Preserving the proper functioning of our mortgage system, which has allowed 80% of Spanish families to access a home of their own, must be a goal for everyone.
José Luis Martínez Campuzano, Spokesperson for the Spanish Banking Association
