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Irish Presidency reaches agreement on new European mortgage rules
Agreement on new Mortgage Credit Directive will mean more information and better protection for consumers.
The Irish Presidency has yesterday reached provisional agreement with the European Parliament on new rules to benefit mortgage holders and consumers across Europe.
This agreement marks the achievement of a key Presidency goal, as set out in the Presidency programme.
Speaking about the deal reached in Brussels yesterday the Minister for Finance, Michael Noonan TD said:
"We have seen in Ireland how practices in relation to mortgage credit have contributed to the crisis in the financial system. The new rules agreed today will give consumers much better information about mortgage applications and offers".
The new rules will strengthen the rights of future mortgage holders across the EU through:
Improved pre-contractual information to consumers including:
A new European Standardised Information Sheet (ESIS) making it easier for people to compare mortgages
New rules for advertising mortgages to include, for example, clearer information on the annual percentage rat
Improved credit-worthiness assessments tougher rules for credit assessment of people applying for mortgages
Intermediaries should have authorisation from the relevant supervisory authority
New competence requirements for mortgage lenders
Improved knowledge and competence requirements for staff of banks and credit intermediaries providing mortgages
Increased choice for consumers by allowing credit intermediaries to operate cross borders
The new Directive also allows for high level principles in relation to financial education for consumers and arrears and foreclosure. It imposes a requirement to adopt measures to encourage creditors to exercise reasonable forbearance before foreclosure proceedings are initiated.
The new rules, set out in this Directive, will also help improve comparability of mortgage products leading to a more level playing field across Europe and help the development of a cross-border mortgage market.
The provisional agreement reached with the European Parliament will now have to be endorsed by EU member states before being finalised.