HIPOTECAS ESPECIALES.

Abstract

Act 41/2007 of 7 December amending Act 2 of 25 March 1981 regulating the mortgage market presents a series of measures whose goal is to bring the mortgage market up to date. In doing so, Act 41/2007 aims to make the market more flexible by expanding the range of credit products on offer with the addition of new items, such as the reverse mortgage, the «global» mortgage and even the concealed rechargeable mortgage. Beginning with the latter, a mortgage recharging facility is a permanent reservation of rank that permits the borrower to reuse the ranked preference of a preexisting mortgage whose registry entry has not been cancelled; its limit is the portion that has already been paid, up to the initial limit of the mortgage. And it enables financial institutions to increase the capital of mortgage loans they have already granted without changing the rank of registration and without the consent of later holders of registered mortgages. What Spanish legislation calls a «floating» or «global» mortgage is a mortgage arranging for the secured coverage to include an unlimited number of obligations that are not determined when the mortgage is created but can be determined under certain eligibility criteria accorded by the parties. Actually, it would be more appropriate to call it a single mortgage securing various present and future obligations. A reverse mortgage, as regulated in the act, is defined as a mortgage credit or loan where a homeowner draws sums of money, usually on a regular basis, although he or she may draw a single sum for which there is a ceiling (set as a percentage of the home's appraisal value at the time the mortgage is made). The reverse mortgage is a loan or credit secured by a mortgage on a piece of real estate that is the applicant's home and constrained by a series of requirements. The financial institution usually recovers its loan plus interest when the homeowner dies; either the heirs repay the debt, or the bank forecloses on the home.