The Crisis of Mortgage Law
Arruñada, Benito (2021), “The Crisis of Mortgage Law”, in A.B. Veiga Copo (ed.) and M. Martínez Muñoz (coord.), Derecho de Garantías, Cívitas Thompson Reuters, Cizur Menor, en prensa.
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This chapter analyzes the situation of the Spanish mortgage market, inscribed in the general crisis suffered by property rights. Until recently, the proper functioning of the institutions that supported the mortgage market (above all, the Land Registry and the summary execution procedure) had made it possible for said market to operate with a notable degree of efficiency and to experience a great expansion, constituting the cornerstone of both housing policy and business financing. However, in the wake of the 2008 financial crisis, some of its essential elements have been drastically altered. By diluting and delaying much of the real enforcement of home equity, such changes have potentially dire consequences. For this reason, it is now doubtful how much of the Spanish mortgage credit is in fact personal credit today, which, although it has a mortgage guarantee, does so only as a mere safeguard of a complementary nature. If this diagnosis is confirmed, the consequences will be very substantial as soon as monetary policy returns to normal.