The delivery of the house does not cancel the debt and 10 most visited questionsUncategorized
I do not believe that the proposal formulated by CIU to the Congress of Deputies was believed by them nor with all my respects for training. In the Spanish legal system, the mortgage loan is a personal debt of the owner and the home is a real guarantee for the bank.
If you ask me if it is fair for a family to lose their home because they cannot pay the mortgage, I will tell them no. The Spanish financial system, to my humble understanding, suffers from regulatory mechanisms to avoid dramatic situations that have a solution.
Legal security of an institution
But the solution is not to charge the legal security of an institution such as the mortgage loan. In this case we could say that ” hell is paved with good intentions “; in more economic terms, radically changing the civil and commercial regulation of the mortgage guarantee loan would cause serious perverse effects , a concept that refers to the fact that a seemingly positive measure ends up creating unwanted and unexpected effects. Some of the perverse effects of changing Spanish legislation to the US system would:
Collapse of the Spanish financial system
When delinquencies skyrocketed (many people would return their home without thinking about it), incorporate depreciated assets in their balance sheets and definitively close the international market to Spanish banks (there are billions of securities issued with mortgage guarantees). The collapse of the bank may attract some, but let’s not forget that our savings and pensions are part of this institution.
- Increased interest paid to place bonds (and we need financing if we want to avoid our bankruptcy as a country). And the interests are paid by us and our children.
- Integral change of the mortgage market, which would increase the prices of mortgages to unassuming levels, would lower the price of housing even more with the consequent effect on the economy as a whole.
The list does not end here, but you can intuit quite catastrophic effects in a seemingly positive way. A stable legal framework that does not depend on the economic or political situation is vital for the delicate economic mechanisms to function properly. Abrupt changes tend to burn the engine.
Taking advantage of the fact that the end of the year is getting closer
Good Finance we comment on the ranking of the 10 most visited questions and answers in 2019 , whose answers are given by its independent experts:
- Can you claim the bank that charges the appraisal and then refuses the mortgage?
- What is the best option to apply for a mortgage for renovations?
- Why being a civil servant does not approve my mortgage?
- Is there a mortgage to buy land and build a new home if I have not yet sold my apartment?
- What are the expenses of a subrogation of a developer’s mortgage?
- Can I compare mortgages based on the down payment?
- Are there banks that grant 80% of the appraisal value?
- Can you get a mortgage to buy land with a tool house?
- Should I change a variable mortgage to a fixed one?
- Can insurance be contracted with an entity other than the bank to which we requested the mortgage?
The 10 most visited mortgage questions in 2019