Mortgage Credit and Professional Advice Certificate Program

The methodology allows participants to interact through the Canvas/CUNEF online learning platform with the varied content of each subject (technical notes, virtualised content, videos…) in a flexible manner. This allows each participant to tailor their allocated timetables to their individual circumstances. The CUNEF online teaching methodology is based on a planning schedule for each learning module in which participants combine analysis and viewing of the range of content (virtualised content and self-explanatory videos) together with hours of study and individual work. Upon completion of this process of training and study they take the self-administered test, which must be passed in order to sit the certification examination.

Once the online training program is complete, those participants who have fulfilled the program requirements (successfully completed the self-administered test for each teaching module) sit the Certification Examination on one of the dates scheduled by CUNEF.

The subject covers the required knowledge and skills required allowing participants to:

• Understand the main macroeconomic variables, their indicators and sources of information.
• Understand the theoretical fundamentals explaining the behaviour of the main macroeconomic variables.
• Be able rigorously to interpret any report on the economic cycle using the main economic/financial variables, so as to use this as the basis for accurate and reasoned customer advice.
• Describe the functions of financial systems and the assets traded.
• Understand the different financial markets that make up the Spanish financial system, including the real estate loan market.

Mortgage loan market.  The subject covers the required knowledge and skills required allowing participants to:

• Understand the reference variables of the real estate market in Spain, in terms of both volumes and prices.
• Understand the recent evaluation of the aforementioned variables.
• Understand the reference variables for volumes and prices in the real estate loan market.
• Understand the official interest rates used in mortgage loans.
• Understand the fundamentals of the monetary policy structured by the ECB and its influence on the evolution of interest rates, and how this is connected with the Euribor, the main reference rate in Spain.

The subject covers the required knowledge and skills allowing participants to:

• Understand the real estate mortgage as a real right of guarantee from when it is constituted until it expires and is cancelled.
• Determine the scope of the mortgage as an encumbrance of the guaranteed asset and the effectiveness of the actions available to the mortgage creditor, the holder of the real right of mortgage, in the event of a breach of the principal obligation.
• Acquire appropriate knowledge of the changes made by Act 15/2019, regulating real estate credit contracts, in comparison with the prior regulations, essentially regarding the control of abusive clauses, and other measures focused on consumer protection
• Understand the existing relationship between mortgage credit and insolvency proceedings.

Estimation of total costs and expenses incurred by the customer. Amortisation methods and instalment calculation. Risks associated with loan products for the borrower (interest rates and exchange rates). The subject covers the required knowledge and skills required allowing participants to:

• Understand when a loan is a mortgage, and the difference compared with other types of loan.
• Determine the intended aims when arranging a mortgage loan.
• Analyse the different types of mortgage loan and their risks.
• Define the variables and magnitudes that characterise a mortgage loan.
• Determine mortgage loan fees and expenses.
• Understand the concept of financial capital.
• Compare financial capitals, establishing an order or equivalence among them.
• Understand the concept and properties of financial laws.
• Establish the conditions that a function must fulfil to be a financial appraisal law.
• Understand the concept of financial income.
• Analyse the concept and determine the financial capital value of an income.
• List and distinguish the different types of financial income.
• Study the general relationships, under compound capitalisation, between the present value and the final value of income.
• Relate the values of post-payable incomes to those corresponding to pre-payable incomes.
• Determine the expressions serving to calculate the present value and the final value of constant immediate incomes.
• Obtain the value of constant deferred incomes.
• Describe loan amortisation operations, highlighting their basic characteristics.
• Establish a general approach to study a loan operation with multiple consideration and interest in arrears.
• Draw up the amortisation table for a loan operation.
• Analyse the characteristics and basic magnitudes of fixed instalment or French loans.
• Analyse loan amortisation operations in the event of grace or deferral periods.
• Calculate the effective cost, return and APR.
• Study the different forms of amortisation for reference-linked loans.
• Analyse the standard French method.
• Identify the risks of variable interest rate loans.
• Draw up the amortisation table for such loans.
• Understand the functioning, benefits and risks of multi-currency loans.
• Understand the functioning, benefits and risks of a reverse mortgage.

The subject covers the required knowledge and skills required allowing participants to:

• Acquire knowledge of the legal system governing the acquisition of real estate in Spain. This requires an understanding of what is known as the “theory of title and mode”, since in Spain acquisition and conveyance require a contract to perform the transfer together with the change of possession (handover).
• Acquire sufficient knowledge of the nature of a real estate asset and a contract.

The subject covers the required knowledge and skills required allowing participants to:

• Acquire appropriate knowledge of the insurance policies associated with real estate loans.
• Understand the taxation of real estate sale and purchase operations and of mortgage loans for the acquisition of real estate.
• Acquire sufficient knowledge as to the taxation of real estate conveyance and subsequent documentation in a notarial instrument. An understanding is required of the following taxes:
• IRPF (‘Personal Income Tax’) with regard to capital gains, payable by the vendor
• VAT or ITPO (‘Asset Transfer Payment Tax’), borne by the purchaser, either as the party charged the VAT or the ITPO
• IIVTNU (‘Urban Land Appreciation Tax’), for which the taxpayer is the vendor
• Documented Legal Acts Tax, as applied to notarial instruments for operations subject to VAT, for which the taxpayer is the purchaser

In addition, the mortgage loan is subject to indirect taxation, since Documented Legal Acts Tax may apply with regard to notarial instruments.

The subject covers the required knowledge and skills required allowing participants to:

• Understand the specific requirements to be fulfilled by an appraisal in order to be deemed valid for the granting of a loan with real estate collateral; the legally qualified agents to perform the appraisal, and the appraisal regulations that must be fulfilled.
• Understand what an appraisal company is, and the role that it plays in the mortgage evaluation system.
• Understand the requirements that must be fulfilled by appraisers in terms of qualifications and independence.
• Understand the valuation regulations that must be fulfilled by appraisals for the granting of loans with real estate collateral.
• Understand the circumstances in which appraisals cannot be performed to grant a mortgage loan.
• Understand the value for consumers and financial institutions of an appraisal report, on the basis of its contents and other characteristics.
• Understand the documentation required in each case to perform an appraisal, and which of these documents must be provided by the customer.
• Understand the checks performed by the appraiser in the context of an appraisal.
• Understand the conditioning factors and warnings, and the consequences of their inclusion in mortgage valuations.
• Understand the difference between the mortgage value and the market value.

Understand the typical valuation methods in the case of homes and the criteria to establish the value of properties that are to serve as mortgage collateral.

The subject covers the required knowledge and skills required allowing participants to:

• Understand the functioning of notary offices, the freedom of choice of notary, and the organisation and effects of the Land Register. Both institutions lie within the context of what is known as preventive legal certainty, since their function is to avoid litigation, facilitate civil and commercial legal dealings, and to support credit and finance in these spheres.

The subject covers the required knowledge and skills required allowing participants to:

• Acquire sufficient knowledge of the process of evaluation of the payment capacity/solvency of the borrower under the contractual obligations, to ensure that the risk assumed is consistent with the lender’s risk appetite and policies.
• Understand the indicators of a borrower’s solvency and credit ranking and rating tools.
• Understand the contents and function of the risk report issued by the CIRBE (the Bank of Spain Central Risk Information Register)
• Acquire sufficient knowledge of how information from the CIR (Central Risk Information Register) is used from the perspective of lender institutions, in the development of policies for the granting of credit and management of risk.
• Understand in detail the content of the risk reports issued by the CIRBE.

The subject covers the required knowledge and skills required allowing participants to:

• Understand the ethical principles required in order to instil ethics in business operations.
• Understand why greater ethics are required in order to increase the business value of enterprises and professionals in the financial sector.
• Understand the most common ethical conflicts in operations by financial sector professionals
• Understand the standards of professional ethical conduct incumbent on personnel acting for the lender, the credit intermediary or, where applicable, the designated representative.

Bearing in mind that the two core aims of Directive 2014/17/EU on real estate credit agreements for consumers are: first of all to implement mechanisms to protect consumers so as to avoid excessive household debt, and furthermore to ensure that the individuals providing information and/or advice at lender institutions have and maintain sufficient knowledge in order to perform these functions in connection with real estate finance, the “Identification of customers and target market” module is developed with the following aims:

• Define the actions serving to identify potential customers for a real estate financing operation, taking into account the specific characteristics of the real estate credit: its object or purpose, the considerable amount involved, the long repayment term and potential risks for customers.
• Understand the criteria used in matching the profile of such potential customers in terms of: usefulness of the finance, analysis of their solvency and risk profile in accordance with the design characteristics of real estate loans in terms of: fixed or variable rates, suitability of the loan or credit, risk mitigation hedges, etc.
• Understand the different segments of consumer real estate finance and the characteristics of the specific and distinctive elements brought in by the new regulations in terms of: contractual transparency, economic relations between lender and borrower, along with other associated products bundled with the loan.

Enable and prepare professionals at financial institutions to explain and/or advise as to the different (financial and other) risks that may be faced by such customers, such as the offering of financial instruments that could mitigate the risks.

Bearing in mind that the two core aims of Directive 2014/17/EU on real estate credit agreements for consumers are: first of all to implement mechanisms to protect consumers so as to avoid excessive household debt, and furthermore to ensure that the individuals providing information and/or advice at lender institutions have and maintain sufficient knowledge in order to perform these functions in connection with real estate finance, the “Real estate Loan Design” module is developed with the following aims:

• Define the characteristics to be taken into account in new loans and/or credits within the context of the new Directive and its transposition into Spanish legislation by means of Act 5/2019, in terms of the commercial and risk parameters brought in by the new regulations.
• Understand the different elements that characterise the offering of real estate finance for individual consumers (object and scope of the new regulations) in economic terms (interest rates, fees, other expenses and cover), and with regard to analysis of the borrower’s solvency and risk profile.
• Understand the financial and general risks in the design of real estate loans, and the establishment of the corresponding hedging instruments.
• Design real estate loans and credits in accordance with the responsibility of financial institutions and in a manner compatible with the general aim of transparency and consumer protection pursued by the Directive and its application to the domestic market.