The securitization of a mortgage is the sale of the mortgage loan to a third party for a price. According to the Bank of Spain (@Bank of Spain), with this action the entities “sell all or part of their risks to obtain new financing with which to continue developing their business”. This securitization allows the change of loan holder without the need to notify the borrower. In other words, if our bank decides to sell our mortgage, for example, to an investment fund, it does not have the obligation to notify us.
A mortgage loan is one in which, in addition to the personal guarantee, the property is affected as a guarantee for the payment of the loan. This characteristic is what makes it possible for mortgages to have a cheaper interest than other types of loans offered by financial institutions. In addition, as the amount of the investment is high, the term for its return is usually longer, precisely to facilitate its payment. But our bank can package our home loan and that of many other clients to create a financial product with them and sell it to investors. In this way, financial institutions obtain liquidity to continue investing and, at the same time, transfer the risk that some mortgages entail to third parties.
When we already have a mortgage loan of any type (fixed, variable, mixed, fixed-rate interest), we only take care of paying the monthly installment of the loan. And since it is a direct debit payment, the usual thing is that we do not hear about his contract again if there is no problem or we want to renegotiate some aspects. So it is most likely that we will not find out if our financial institution chooses to securitize our mortgage. If the bank has not communicated the sale to us of our loan and its title does not appear in the Property Registry, the banking supervisor indicates that we can find out by these procedures:
- By written request addressed to the bank that granted us the mortgage loan.
- Through the Court.
- Looking for the degree on the website of the National Securities Market Commission (CNMV).
According to the Bank of Spain, when the entity that granted you the mortgage loan ceases to be the creditor of the same because it has securitized your mortgage and has commercialized it, it also preserves by Law the registry ownership and the maintenance of its administration, unless there has been a pact against. What’s more, your bank «maintains its obligations regarding compliance with regulations transparency and protection of customers and good practices and banking uses ”.