Function and organization of a legal department for mortgage lending in Russia

Among the specialized personnel needed by such a financial institution will be attorneys. This paper presents advice to financial institutions regarding the function and organizational structure of, and critical topics of interest to, its legal department. The law codes concerning mortgage lending in Russia are in development and are likely to evolve rapidly over the next several years. This paper is not intended to reflect or comment upon the condition of Russian mortgage law. Rather, its objective is to comment on the structure of such legal departments, taking into account general principles of Russian mortgage law, and the nature of U.S. mortgage lending and corporate law. Thus, a number of topics that are addressed in this paper are not yet germane to the operation of a financial institution involved in the mortgage lending business in Russia. For example, secondary mortgage markets are covered here even though they will not be relevant until the Russian system has developed over a period of years. This paper assumes that many areas of the mortgage law in Russia will develop along lines similar to those in the United States. A mortgage lending lawyer spends a good deal of time being concerned with laws designed to protect consumers from lenders. Consumer protection laws respond to fundamental human nature and the resulting business practices in which some mortgage lenders have taken unfair advantage of borrowers. We have also assumed that lawyers represent a significant talent pool in the development of mortgage lending institutions, and that because of the complex and uncertain nature of the developing mortgage law in Russia, lawyers will play an active role in the operation of the Russian mortgage lending institutions. Although certain functions, such as mortgage loan closings, will be handled principally by lawyers, lawyers will need to work closely with, and as advisors to, senior management and other specialized professionals throughout the institution, including senior managers, loan officers, accountants, economists, and computer specialists.