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The Negotiating Agency, the first fintech company allowed to carry out mortgage brokerage

The Bank of Spain has granted the accreditation to carry out mortgage brokerage activity to the first finch company, the Negotiating Agency for Banking Products. Just a week ago, the Bank of Spain also granted Idealista the first authorization for an online comparator to operate as a mortgage broker. In the last 30 days, the request for debt refinancing operations has grown by 14%.

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The Banking Products Negotiation Agency has been the first fintech company to achieve the accreditation granted by the Bank of Spain to carry out mortgage brokerage activity, the entity has announced in a press release.

If you want to read more details about the mortgage brokerage activity that the Negotiating Agency will carry out and to read the latest finance news in the world, download the Born2Invest mobile app.

The authorization granted by the Bank of Spain is mandatory

This authorization is mandatory, as regulated by the Real Estate Credit Law that came into force almost a year ago, “to perform mortgage brokerage operations, and puts the regulation of mortgage brokers at the height of that exercised on financial institutions,” as it was explained by the Negotiating Agency.

In addition, “the authorization now obtained raises the requirements to the sector of the intermediation to the level of those of the banking, guaranteeing this way the professionalism of the teams and their suitable formation, as well as the fulfillment of procedures of management to the highest level”.

In 2009, the Negotiating Agency already promoted regulation of the sector that, at the time, was meant to the consumer areas of the Autonomous Communities. It included strict requirements in terms of transparency in the offer and civil responsibility towards the users of the service.

Just a week ago, the Bank of Spain also granted Idealista the first authorization for an online comparator to operate as a mortgage broker. As explained by Idealista, “it requires that all persons carrying out mortgage brokerage or advice work on mortgages be registered and authorized by this institution. Thus, it also says that the work of mortgage intermediaries is to provide information to consumers and help them during the process of searching and formalizing their mortgage.”

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The debt refinancing operations have increased

With the state of alarm, financial and mortgage activity has collapsed. However, in the last 30 days, the request for debt refinancing operations has grown by 14%, while the conversion ratio of operations has grown by 40% in the same period, according to the Negotiating Agency. In its opinion, that has caused the banks to turn to this mortgage solution for purposes other than the acquisition of housing, which has taken on special relevance in the current situation of uncertainty.

“Refinancing represents resolving at once any situation of lack of liquidity in the short and medium term, as it means a reduction in payments monthly financials of up to 80%. At the same time, it allows for a definitive reordering of the family’s finances, something that is always necessary but is now essential”, pointed out the Negotiating Agency.

For the banks, because it is an alternative to generate new production that is very profitable with a paralyzed buying and selling market that will take some time to get back to normal.

“In this difficult situation for families, entities find in refinancing a solution to offer their clients more favorable options for financing that meets their most pressing needs: reducing financial effort (mortgage consolidation) and increasing liquidity. It also contributes to contain the system’s default rate while improving its profitability, at a time when the formalization of mortgages for home purchase may fall by as much as 60% in the months of April and May this year.” This will mean the signing of some 26,000 mortgages, compared to the 63,915 that were signed in the months of April and May last year, according to data from the Land Registry collected by the National Institute of Statistics.

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(Featured image by AlexanderStein via Pixabay)

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First published in ElConfidencial, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Anne Kings is a reporter for the financial sector, often tackling Wall Street and shareholders' interests. She also covers the intersection of media and technology, and delves into interesting topics on entertainment. Sometimes she also writes about the cannabis industry, in particular CBD and hemp. She is currently based in New York.