LA INDEPENDENCIA DEL REGULADOR HIPOTECARIO.

Abstract

This paper addresses the independence of mortgage legislators. It begins with an introduction analysing the two biggest threats that all legislators have to face: the threat posed by the government and the threat brought to bear by the dealers who trade on the market. Both sources of threat try to intervene in and control the market in order to use it to their own benefit. One, the government, seeks primarily an increase in its power, so as to augment its control over society. The other, dealers, pursues its own material profits. While the government's usual method for reaching its goal is to establish a scheme wherein legislators depend on the government, dealers push for the eradication of control or, if control exists despite their efforts, they fight to give the exercise of control to hired professionals who freely compete for the job, because dealers know it will not be difficult for them to modulate any control exercised under such conditions. In recent years in Spain government has seemed to follow the first path. It has insisted on trying to establish a relationship in which registrars are subordinate to or dependent on the Directorate- General of Registries and Notarial Affairs. The gist of the government's reform, however has been to prevent registrars from judging the legality of certain aspects of legal acts, and to transfer that power to other agents. These «other agents» act in a free competition scheme and for that reason are susceptible to being easily made the dummies of the dealers who have got a stake in the real estate, mortgage and commercial markets. The paper then goes on to analyse the causes making dealer control over such agents unavoidable. For that purpose, the paper looks at the mortgage market in the light of the teachings revealed by games theory, with special emphasis on the nature of the risk and the benefits that characterise the action of these agents, to whom government is attempting to assign a function that should properly belong to legislators. To corroborate the harmful effects that would ensue if this hypothesis were consummated, the paper analyses certain crises (the bursting of the dot-com bubble and the current slump in mortgage markets) whose origin lies in the fact that agents working in free competition (mainly auditors and ratings agencies) have been assigned competences that ought to belong to legislators, because the competences in question cause external effects or because the agents' decisions affect not only the parties involved in the act, but third persons and the community itself as well.