Searching for “more competence and objectivity in the valuation market”.
During the long parliamentary process of this law, the minister of Economy, Luis de Guindos, has had the occasion to refer to the comprehensive reform of the regulation of the companies that value properties. He always defended that the reform looked for “an equilibrium between all parts”. He therefore concentrated his efforts in “reinforcing the independence” of the rating companies and in “toughening the possible offences” they might commit.
In order to reinforce this “equilibrium” the debtor should benefit from, the financial institutions will have to “accept any approved valuation provided by the customer” and the non compliance of this obligation will be punishable, which will “increase the competence and objectivity within the valuation market”, according to the minister.
What is the reason for these measures? The rating companies have been traditionally – mainly in the years of the construction boom – controlled by the financial institutions, which commissioned the valuations of properties whose acquirers would then receive a mortgage from that same institution. A conflict of interest was then created which shed some doubt on the valuation companies. Even though it is true that they are less and less dependent on banks, the reality of evictions has shown that it is still excessive.