Law 2/1981, of 25 March, of Regulation of the Mortgage Market, developed by Royal Decree 685/1982, and subsequent provisions that complement it, represented an initiative aimed at promoting the creation of a large the mortgage market, removing the existing legal and administrative obstacles to this, as one of the instruments that would allow a more effective policy on housing, construction and urban planning, establishing a structure complete for the financing of such activities through the issuance by the Entities credit for mortgage securities that would have the guarantee of mortgage loans.

The experience gained in the operation of this market has shown that it is appropriate to review certain principles contained in the regulatory rules of the market, which are too rigid and are currently too rigid. Flexibility is possible to address without further guarantees that they should preside over active and passive mortgage transactions.

This purpose falls within the framework of the Second Directive of the Council of the EEC of 15 December 1989 for the coordination of laws, regulations and administrative provisions relating to the taking up of business of the credit institutions and their financial year (89/646/EEC).

To this end, it seems appropriate to address in this partial revision the current regulatory norms, in order to eliminate those provisions that hinder the expansion of the Mortgage Market, anticipating formulas to enable the Spanish entities to be in a position to deal with this new situation.

Schematically the reform affects the following aspects:

Certain measures are introduced to encourage the issuance of mortgage cards.

The obligation to reinvest in the product's mortgage credits from the emissions made is abolished.

It is lowered and, if applicable, the requirement for a certain percentage of mortgage credits is eliminated in order to issue cards.

It is feasible to issue cedulas based on acquired mortgage holdings.

The limits of computable loans on buildings under construction are extended.

The figure of the mortgage units is power, as it is emphasized that through them the mortgage credits of a credit institution are involved, with the favorable consequences for the same, for the purposes of the Box and own resources ratio.

In its virtue, in accordance with the opinion delivered by the State Council, on the proposal of the Minister of Economy and Finance, and after deliberation by the Council of Ministers at its meeting on 2 August 1991,

DISPONGO:

Single item.

Articles 2, one; 26, one-do; 30, one; 32, three-four; 35; 37, three; 39; 40, one-cinco; 43, two and three; 44, 46, one; 53; 59, one and two; 60, two-three-four; 61; 62, one-two-three; 64; 65, one-do; 66; 67, three; 69; 72, one-do; 81; 82, one; second transitional provision and additional provision of Royal Decree 685/1982, of 17 March, shall be drawn up in the form subsequently indicated.

TRANSIENT DISPOSITION

The adaptation of the Specialized Entities to the requirements of Article 39.4 shall be carried out within the maximum period of one year from the entry into force of this Royal Decree.

REPEAL PROVISION

The following provisions will be repealed with the entry into force of this Royal Decree:

Articles 33 ,tres; 63, four; 82, three, second paragraph, and 82, four of Royal Decree 685/1982 of 17 March 1982 on the regulation of the mortgage market, with the amendments introduced by Royal Decree 1623/1985 of 26 June 1985. August.

The order third and fourth of the Order of December 7, 1984.

The eighth paragraph, second paragraph, of the Order of 22 June 1982.

MODIFIED ITEMS

Art. 2. Enumeration.

One. The financial institutions that can participate in the mortgage market are:

(a) The Mortgage Bank of Spain and the other State-owned credit institutions of the State.

b) Private Banks.

c) The Savings Banks and the Spanish Confederation of Savings Banks.

d) The Savings Postal Box.

e) The financing entities regulated by Royal Decree 896/1977 of 28 March.

f) Cooperative credit institutions.

g) Mortgage credit companies that meet the requirements of this Royal Decree.

Art. 26. Loan limits.

One. The guaranteed loan shall not exceed 70 per 100 of the value of the value of the mortgage, except for the financing of the construction, rehabilitation or acquisition of housing, in which it may reach 80 per 100 of that value.

Two. Mortgage loans that initially exceed these percentages may be used to cover the issuance of credit cards and mortgage bonds when, as a result of the amortisation experienced by their principal or the change in the value of the goods on the market, after the relevant valuation, their amount does not exceed those percentages in relation to the initial or revised valuation value of the mortgage.

Art. 30. Damage insurance.

One. The property on which the mortgage is constituted must have insurance against damages appropriate to the nature of the property, and in which the sum insured matches the value of the value of the insured goods excluded the non-insurable elements by nature.

Art. 32. Credits excluded or restricted.

Three. Whatever the amount of the credit referred to in the preceding paragraph, for the purposes of coverage, the computable limit shall be determined by the sum of the following amounts:

Fifty per 100 of the value of solar value.

Fifty per 100 of the value of the works done, excluding the impact of the solar.

Four. The amounts resulting from the application of the preceding point may be counted only for the purposes of coverage as soon as their sum does not exceed 20 per 100 of the total amount of the funds of the appropriations concerned with a bond issue or the portfolio which determines the limit of the issuance of ceding.

Art. 35. Assessment criteria.

In order to determine the value of the mortgaged goods for the purposes of the provisions of Law 2/1981, the lesser of those resulting from the application of the criteria laid down in the specific rules of assessment of the property in the mortgage market for each of them, to be approved by the Minister of Economy and Finance, prior to the report of the Institute of Official Credit.

In those goods which, because they are covered by some form of public protection, the administrative provisions limit their profitability or sales price shall be assigned, at most, such value or the value of those limitations (a) release, without prejudice to the effect of the provisions laid down in the legislation on housing for official protection.

Art. 37. Assessment report.

Three. The technical evaluation report, as well as the certificate in which it can be synthesized, must necessarily be signed by an architect, an apparatus or a technical architect, in the case of urban, solar and real estate built with residential destination and, in other cases, by an Engineer or a technical engineer of the relevant specialty according to the nature of the object of the assessment. This report will not have to be endorsed by the respective Official College and will expire six months after its date.

Art. 39. Requirements.

The specialised entities referred to in the previous Article shall meet the following requirements:

One. Take the form of a company, located in the national territory.

Two. Limit your social object to the valuation of all types of goods.

Three. Have a minimum capital of 25,000,000 pesetas, paid in its 50 per 100, at least.

Four. Having a minimum number of 10 professionals with the capacity to perform the task, they already belong to the staff, and they are hired as free professionals.

Five. Appear on the Official Register of the Banco de España.

Art. 40. Registration in the Official Register.

One. The founders of the valuation entities, prior to the commencement of their activities, shall apply to the Bank of Spain for the registration in the corresponding Register, to which the Bank of Spain shall present the following documentation:

a) The enrollment request.

b) The project of the Statutes of the Entity.

c) The relationship of the components of the Board of Directors and directors of the Entity.

(d) The relationship of the medical professionals, with the justification of the certificates issued for the exercise of the assessment. Thereafter, the variations shall be reported.

Five. The system of inspection of the institutions or services of assessment shall be carried out in accordance with the provisions of an Order approved by the Minister for Economic Affairs and Finance, issued pursuant to the provisions of Article 7 (2) (c) of Law 2/1981, of March 25.

The inspection of compliance with the valuation rules and the control of the operation of the entities or services of valuation corresponds to the Banco de España, which will sanction the violations committed in accordance with the provisions of the in the applicable rules.

Art. 43. Title classes.

Two. The mortgage cards can be issued by the Banco Mortgage de España and the other State Public Capital Credit Entities, the private banks, the savings banks, the Spanish Confederation of Savings Banks, the Postal Fund of Savings, Credit Unions and Mortgage Credit Companies. The latter, in order to issue such securities, will have to maintain 75 per 100 of its portfolio of credits invested in the mortgage loans that the Mortgage Market Act regulates.

Three. Mortgage bonds may be issued by the Entities referred to in the preceding number and, in addition, by the Financing Entities, provided that they meet the conditions and requirements that are required in this Royal Decree.

Art. 44. Mortgage cedulas.

1. Mortgage cards shall contain at least the following data:

One. Specific designation and indication of its regulatory law.

Two. The expression of whether they are nominative, to the order or to the bearer and, where appropriate, the name of the holder or that of the person to whose order they are freed. In default of express qualification shall be understood to be issued to the bearer.

Three. Their nominal value and the value of the premiums, if they have them.

Four. The period and form of depreciation of the capital, expressing, where appropriate, the drawing periods.

Five. The interest they earn and their maturities.

Six. The warning to be subject to a draw on an undetermined date, including those with a fixed repayment term, in the cases provided for in this Royal Decree.

Seven. The option that, as for the form of payment, allows article 54 of this Royal Decree.

Eight. The expression of whether the cedula is unique or whether it belongs to a string and, in the latter case, the number of the title and the number or letter of the string, if there were several.

Nine. The date of the issue and those of the corresponding administrative authorities.

Ten. The name and address of the issuing Entity and, if applicable, the data of its registration in the Commercial Registry.

Once. The stamp of the issuing Entity and the signature of at least one of its Directors, which may be printed, in compliance with the legal requirements, when the cards are issued in series.

2. Where the mortgage cards are represented by means of account entries, it shall be stated in any case in the public deed referred to in Article 6 of the Law 24/1988 of 24 July of the Stock Market, those of the data mentioned in the preceding number 1 that are compatible with such a form of representation.

Art. 46. General rules.

One. The performance of the issuance of the mortgage and mortgage bonds shall be adjusted, without prejudice to the provisions of this Royal Decree, to the regulatory rules of the market of securities to the covenants, statutes or rules of the issuing Entities, and to the agreements of their competent bodies, provided that they do not contravene the provisions of that provision.

Art. 53. Person legitimated.

One. In the securities issued to the bearer, the issuing Entity shall recognize its holder as the owner of the securities.

Two. In the case of nominative or issued to the order, the amount of the capital and the amount of interest or premiums shall be paid, upon presentation of the corresponding securities or coupons, to the holder who accredits the person designated in the name of the name or, in those issued to the order, the order of which they were freed.

Three. If the name of the nominee or the order has been transmitted, the debtor entity shall make the payment to the holder stating that he is the last transferee of the nomination or, in the case of the order, the last formally legitimized by the chain of endorsements or that it justifies being legitimate causative of one or another or of the persons mentioned in the number 2 of this article.

Four. The issuing entity shall take account of the transmissions of securities referred to in the preceding number, if it is presented to it for such purposes, but the prior taking of the transmission or the previous transmissions shall not be a necessary condition for the payment.

Five. In no case shall the debtor Entity be responsible for the validity of the transmissions or the authenticity of the signatures listed therein.

Six. In the case of securities represented by means of account entries, this shall be the result of the general rules governing them.

Art. 59. Of the cells.

One. The volume of mortgage credit cards issued by an Entity and not due may not exceed 90 per 100 of a basis of computation formed by the sum of the unamortized capital of all the mortgage loans in the Entity's portfolio. to serve as a cover. The capital of the mortgage units acquired by the Entity which are held in their portfolio shall be computed as such credits and shall be equally eligible.

Two. If the Entity has issued bonds or mortgage holdings, the amount of any credit affected to bonds and the share of those that would have been the subject of the calculation shall be excluded from the calculation basis referred to in the preceding paragraph. participation.

Art. 60. Resetting the ratio.

Two. However, if the limit is exceeded by increases in the amortisation of the loans concerned, or by any other cause, the issuing Entity shall restore the balance by means of the following actions:

a) Deposit of cash or public funds in the Banco de España.

b) Acquisition of market bonds and bonds as appropriate.

c) Grant of new mortgage loans or acquisition of mortgage holdings, eligible to be used to cover the cards.

d) Affecting the payment of mortgage bonds for new mortgage loans that are eligible to serve as collateral.

e) Depreciation of cards and bonds for the amount necessary to restore balance. This amortization, if necessary, will be anticipated and by lot.

Three. The deposit of cash or public funds shall be made within a maximum period of 10 working days from the date following that in which the imbalance had occurred, provided that the time limit had not been re-established.

In any case, within a maximum period of four months they shall be required by any of the actions referred to in paragraphs (c), (d) and (e) of the preceding number to restore the proportions referred to in Articles 58 and 59.

Four. The deposit of money or public funds referred to in point (a) of paragraph 2 of this Article shall be particularly affected by the Ministry of Law, as a pledge to the repayment of the capital of the cards and bonds, deducted from the amount of the premiums of whatever kind they are. If interest or products are payable, the amount of interest or products shall be equally affected by the payment of interest on such cards and bonds and, if any, the amount of the reimbursement premiums.

Of such deposit, as of its interest or products, the issuing Entity may not be available within four months of the formation, in the case of a card or with the conformity of the Union of Bond and Teners of the single bond of the issue in the case of bonds, which shall be stated in the constitution of the bond. The provision shall have the sole purpose of early repayment of bonds and cards, to grant new hedge credits, to acquire mortgage holdings or to pay the interest or capital of the cards or bonds in circulation at their maturity. that are sold within the given deadline.

Art. 61. Issue.

One. The Entities referred to in Article 2.1 of this Royal Decree may involve third parties in the mortgage credit of their portfolio by issuing mortgage holdings represented by nominative or by-securities securities. account log.

Two. In any case, each value shall relate to a share in a given mortgage credit.

The issuance of multiple units of the same credit may be performed simultaneously or successively, and in both cases, at the beginning or during the term of the loan.

Three. The participation confers on its holder the rights that are established in the Law and those that are expressed in that Law.

The issuer will retain the custody and management of the mortgage credit, as well as the partial ownership of the mortgage credit and will be obliged to perform as many acts as necessary for the effectiveness and good end of the mortgage credit, paying the participants, including in the case of early payment, the percentage that corresponds to the mortgage debtor's perceived interest in terms of capital and interest according to the terms of the issue.

Four. Where the holder of the holding is an Entity authorised to issue mortgage cards, the portion of the mortgage credit incorporated into the holding shall be included in the calculation basis referred to in Article 59.1 of this Royal Decree, provided that the holding is not a risk asset of the issuing Entity in accordance with Article 62.3 and that the credit that is the subject of the holding is eligible for hedging purposes.

Art. 62. Prohibitions.

One. Mortgage loans that guarantee the issuance of mortgage bonds may not be the subject of mortgage holdings.

Two. Entities with the ability to issue mortgage credit cards may not participate in the mortgage credit of their portfolio or transmit any shares they have acquired, when, for the purposes of such transmissions, they would have been exceeded. the limits laid down in the article 59.

Three. Where the participation is carried out for the entire remaining period up to the final maturity of the contract and there is no repurchase agreement, the share of the credit shall not be computed as a risk asset of the issuing Entity. In this case, the issuer may not assume any responsibility in ensuring directly or indirectly the good end of the operation or the provision of funds to the unit-holders without having received them from the debtor.

Art. 64. Minimum terms of title or deed.

1. The securities of the mortgage holdings shall be nominative and shall comprise at least:

One. Their specific designation and the indication of their regulatory law, as well as any limitations to their circulation.

Two. The initial capital of the participating credit, its term and form of amortization, the interest it accrues and its maturities, as well as the data of its registration in the Land Registry.

Three. The percentage that the participation incorporates on the mortgage credit, the term and form of reimbursement of the mortgage, the interest that accrues, its maturities, interest of delay, if any, agreed and the other conditions of the participation.

Four. The personal circumstances and the address of the participant or members.

Five. The obligation, in charge of the successive holders of the participation, to notify their acquisition to the issuing Entity, as well as their domicile.

Six. The data identifiers of the issuing Entity, the stamp of the same, and the autograph signature of at least one of its proxies with the power of disposal on immovable property.

When the subscription and holding of the shares is not limited to institutional or professional investors, being able to be subscribed or acquired by the non-specialized public, they will be issued in public deed, of which take note in the Land Registry, regardless of the registration of the corresponding mortgage. If the marginal note is practiced, third parties who acquire any right to the mortgage credit will do so with the burden of the payment and the participation and their interest.

2. Where the mortgage holdings are represented by means of account entries, they shall in any event be included in the public deed referred to in Article 6 of the Law 24/1988 of 24 July of the Stock Market, those of the data referred to in paragraph 1 above that are compatible with such form of representation.

Art. 65. Executive Action.

One. The execution of the participating mortgage credit corresponds to the issuing Entity and the holder of the participation in the terms set out in Article 66.

Two. Without prejudice to the foregoing paragraph, the holder of the mortgage holding shall have executive action against the issuing Entity for the effectiveness of the maturities of the same by principal and interest, according to the percentage of participation and what is established in the issue, provided that the non-compliance with such an obligation is not a consequence of the non-payment of the debtor of the mortgage loan involved.

Art. 66. Privileges of the holder.

If the non-compliance is a consequence of the debtor's failure to pay, the holder or holders of the units shall have the following powers:

a) Compels the issuing Entity to urge foreclosure.

(b) To grant equal rights to the issuer in respect of the issuer's execution, in accordance with any implementing procedure, to that effect, and to participate in the product of the auction pro rata of their respective percentage in the credit executed and without prejudice to the fact that the issuing Entity receives the possible difference between the interest agreed on the loan and the interest agreed upon in the holding, where it is lower.

(c) If the person does not initiate the procedure within sixty calendar days of the notarial diligence of the debt payment order, the holder of the holding shall be entitled to the subsidiary to exercise the right of payment. Mortgage action of the credit involved in the amount corresponding to the percentage of its participation, both by principal and by interest.

In this case, the portion of the non-participating credit and the units not executed as a preferential charge will remain subsisting, understanding that the rematant accepts them and is subrogated in the responsibility of the same, without going to their payment and extinction the price of the auction.

d) In the event of a cessation of the procedure followed by the issuing Entity, the participant may be subrogated to the position of that entity and continue the procedure.

In the cases provided for in points (c) and (d), the holder of the holding may request the competent court to initiate or follow the relevant foreclosure procedure, accompanying his claim for the title of the original of the participation, the notarial requirement provided for in paragraph c), and certification of registration and subsistence of the mortgage. This certification shall be recorded in the Register, by means of a marginal note, that the registration certificate has been issued and the date and identity of the applicant shall be indicated. These circumstances shall be recorded in the certificate issued.

Art. 67. Transmission.

Three. The issuing institution shall carry out a special book in which it shall record the shares issued on each credit, as well as the transfers of the shares to be notified to it, where the shares are applied to the shares in respect of the nominal securities Article 53 of this Royal Decree is established. In the book itself, it shall record the changes of domicile that have been notified to it by the holders of the units.

In this book, you will also find the following data:

(a) Date of opening and maturity of the credit, initial amount of the credit and form of settlement.

b) Register mortgage data.

Art. 69. Secure.

The Entities participating in the mortgage market will also be able to ensure the payment of principal and interest of the participation by the hiring of insurance in favor of the participant for the coverage of the principal and interests, and in charge of the issuing Entity.

Art. 72. Investments.

One. The securities, bonds and mortgage units shall be admitted on the same terms as the securities listed on the stock exchange for the composition of the investments constituting the special reserve funds, with the destination of the Commercial enterprises.

In particular they will be supported:

(a) In the constitution of the investments of the technical reserves of the Insurance and Capitalization and Savings Entities.

(b) In the investment of the resources of the Company and the Investment Funds of Mobilia, Pension Funds, or other similar entities of collective investment.

(c) For the investment of any reserve funds of Financial and Non-Financial Entities that are required to comply with administrative investment obligations in Exchange-listed fixed income securities.

Two. Mortgage holdings which under the rules governing the issue of securities do not have the consideration of negotiable value shall be considered as mortgage loans for the composition of the investments constituting the funds of the special reserve, with the destination of the commercial enterprises referred to in the preceding paragraph.

Art. 81. Admission to Stock Exchange.

The admission to trading on the Stock Exchanges of the mortgage securities issued pursuant to Law 2/1981 of March 25, and this Regulation, shall be in accordance with Law 24/1988 of 28 July of the Securities Market.

Art. 82. Transactions on own mortgage securities.

One. The issuing entities referred to in article dos.1 of Law 2/1981, of March 25, will be able to buy, sell and pay their own mortgage securities to regulate the proper functioning of their liquidity in the market. Such securities may also be amortised in advance provided that at least one year has elapsed since the issuance of the securities and for any cause of the issuing entity's legitimate possession and possession.

TRANSIENT DISPOSITION

Second. The mortgage loan portfolio of credit institutions with the possibility of participation in the mortgage market may be used for the issuance of credit cards, bonds and mortgage holdings if those loans have the same conditions. which are specified in this Royal Decree or which are convalesced by carrying out the appropriate acts.

ADDITIONAL DISPOSITION

The Ministries of Justice and Economy and Finance, in the sphere of their respective competences, are authorized to dictate the complementary and development rules of this Royal Decree.

Given in Palma de Mallorca August 2, 1991.

JOHN CARLOS R.

The Minister of Economy and Finance,

CARLOS SOLCHAGA CATALAN