Recent Developments in Mortgage Loans in Spain and the Effects of the Subsequent Legislative Reforms

Abstract

[Abstract] This chapter analyses the evolution of the mortgage loan in Spain during the present century. The economic development of Spain is described with its great connection to mortgages. The text centres on the new conditions incorporated in the loans in the years before the crisis, which were subsequently demonstrated to be unfair terms and caused serious problems for consumers and a lack of confidence in the financial sector. This provoked the reaction of legislators. This chapter studies the effectiveness of the subsequent mortgage laws in their intention to minimize the asymmetrical positions that the lender and the borrower occupy in the contractual relationship. Among the conclusions of the chapter, the authors highlight how each law is more precise but its effectiveness is lacking if the banking culture is not changed in terms of the relationship between to clients.