Home loans are generally guaranteed by a mortgage and so are the preserve, in our legal system, of the notary.
The presence of the notarial profession has become more significant with the recent increase in the number of such contracts, a result of the lower cost of money (though this is still subject to fluctuations) and improvements in living standards that allow an ever greater number of citizens to aspire to the ownership of their home and often of a second home as well. Year after year, the media have been pointing out the continuing increases in the number of mortgages granted. To that must be added the growing commercial pressure for an ever more intensive, and perhaps sometimes ill-considered, use of financial products (within the EU, one might cite the Council's Resolution of 26 November 2001 which expresses concern over excessive indebtedness on the part of consumers and proposes preventive measures regarding the information available to the borrower, the responsibility of those offering credit, charges and expenses in the case of default and the role of lending intermediaries and agencies).
The notarial profession's privileged position for observing what is happening has led it to undertake various initiatives in the area of mortgages; initiatives that address:
- the world of the consumer (and of their Associations), of the weaker members of society and, above all, of families: fundamental areas that are covered by specific rules within the legal system that cannot be ignored; collaboration with the main consumer associations has produced The Citizens' Guides, the first of which is dedicated to home loans and is called “Home Loan Information. Hints for Anyone Applying for a Mortgage”;
- the banks, whose function has a social importance that nobody can deny and whose collaboration is necessary in order to implement the desired improvements: the banks' collaboration is fundamental for a better understanding of the issues and for arriving at the best solutions to the problems;
- the academic world of research bodies and universities that are the main point of reference for a correct scientific approach to these questions.
Summarizing the varying interests represented by the categories mentioned, then, the notarial profession has an institutional duty to guarantee, on the one hand, observance of the law and, at the same time, the validity and effectiveness of contracts, amongst other things by systematically putting into legal context the new products commercial practice is constantly proposing; on the other promoting, to the extent possible, a contractual balance that is suitable for both parties. This has been done, first of all, by promoting various studies and comparisons to analyse and correctly examine issues and material directly thrown up in practice, often in confrontations between the interested parties (consumer associations and A.B.I.), and endorsed by the detailed scientific analysis of university professors.
All this work, obviously aimed at introducing norms to protect consumers and borrowers, developing social and economic awareness of the initiatives of the A.B.I. and consumer associations, as well as the recurrent crises in the mortgage market (as amply documented by the mass media) have led to a change of direction: contractual texts are improving, if only step by step (and sometimes, unfortunately, with sudden backslidings), in part owing to the notaries' perseverance, individually and collectively, in their campaign. Banks' contracts have been thoroughly revised by individual banks which now more frequently abide by the suggestions of the notaries engaged by their clients to handle the financing papers; there have also been cases where whole contractual texts, prepared as precedents, have been reworked with the assistance of notaries.
Where the role of the notary is well established, it becomes customary to consult him before even choosing a bank, in order to receive information and advice: on such occasions, the notary, given his prestige and competence, can bring his experience to bear. Consulting a notary in good time is truly critical and is to be encouraged, since the notary can do much less if problems are posed immediately before the contractual deadlines when the purchaser of the property, in order to meet his commitments, absolutely must somehow obtain the financing. In order that the best operative practices should become more homogeneous throughout the country, it is important that the habit of turning to one's chosen notary in good time when contemplating purchasing a property and/or taking out a mortgage loan should become more widespread.
In addition to advice about the civil law, there are also questions as to fiscal matters: on this notoriously thorny subject, the notary can provide assistance in correctly setting up the operation so as best to meet the mortgagor's expectations.
These tasks, which may be termed legal and tax consulting, are in addition to those traditionally associated with the notary's role: preliminary investigations (so-called mortgage and cadastral "searches"), a legal report for the bank, writing and preparation of the deed, all the post-signing formalities (fiscal registration, mortgage registration, issuing of executive and non-executive copies), that have always been the basis of public trust in a reliable system for financial/property negotiation.