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Mortgage credit directive

Mortgage credit directive. Brussels 12 March 2014. ECCG meeting DG Markt, Unit H3. ”Mortgage credit Directive”. Proposal for a Directive on credit agreements relating to residential immovable property – COM(2011)142 - Ensure responsible lending and borrowing behaviour;

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Mortgage credit directive

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  1. Mortgage credit directive Brussels 12 March 2014 ECCG meeting DG Markt, Unit H3

  2. ”Mortgage credit Directive” • Proposal for a Directive on credit agreements relating to residential immovable property – COM(2011)142 • - Ensure responsible lending and borrowing behaviour; • - Take the first steps to creating a single market with a high degree of consumer protection. • Entry into force of the Directive – March 2014 • Transposition deadline – March 2016

  3. Content of the Directive • Scope • Information to consumers • Principles and quality standards for performance of services • Creditworthiness assessment • Early repayment • “New” Articles • Creditintermediaries • Cooperationbetweencompetentauthorities

  4. Scope • Positive scope • Credits secured by a mortgage or comparable security • Home loans • Exclusions • Member States’ options under certain conditions

  5. Information to consumers • Advertising • Standard information • General information • Pre-contractual information • European Standardised Information Sheet • Creditintermediaries • Adequate explanations

  6. Principles and quality standards • Principles for contacts with consumers • Fairness, honesty, professionalism • Remuneration • Quality standards for performance of services • Competence and knowledge requirements • Advisory services

  7. Creditworthiness assessment • Obligation prior to granting the credit • 'Relevant factors' • The creditoronlymakes the creditavailablewhere… • Early repayment • Right to repay early • Possible conditions for exercising the right (MS) • Possible compensation for the creditors (MS)

  8. ‘New’ Articles • Tying practices • Prohibition as a principle, with exceptions • Foreign currency loans • Information in advertising and in the ESIS • Specificrules to limitriskslinked to the currency • Propertyvaluation • 'Reliable standards' • High- level principles on appraisers

  9. ‘New’ Articles • Financial education • Arrears and foreclosures • Reasonable forbearance by creditors • Caps on charges in the event of default • Best effort price • Return or transfer of the propertycanbesufficient to repay the credit if parties agreeso

  10. Credit intermediaries • Minimum criteria to getadmitted by the home MS • Registration • No further admission needed to operate in other MS • Competentauthorities of different MS • Obligation to cooperate • EBA'spossible assistance

  11. Thank you for your attention

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