| Author (Person) | McLauchlin, Anna |
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| Series Title | European Voice |
| Series Details | Vol.11, No.28, 20.7.05 |
| Publication Date | 20/07/2005 |
| Content Type | News |
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By Anna McLauchlin Date: 20/07/05 Mortgage lenders have welcomed the European Commission's plans for the home loans market, but sounded several notes of caution. They point to the Commission's suggestion that a "new kind of mortgage lender" could appear on the market which, as it would not be a credit institution, would fall outside EU prudential rules. "It's a new idea, but at first sight I don't think that banks would welcome competition from an institution that was not subject to the same position rules as them," said Annick Lambert, secretary-general of the European Mortgage Federation (EMF). "It could be seen as unfair competition.." Internal Market Commissioner Charlie McCreevy said yesterday (19 July): "There has been no work done on this as yet, but maybe some privateers are considering something." He would not comment on whether the Commission was looking at a similar structure to Fannie Mae in the US - a government-sponsored agency that offers low-cost mortgages with an implicit state guarantee. Lambert said that the industry would not support binding legislation to replace the voluntary code of conduct that was agreed between the industry and consumers three years ago. She also warned that the EU harmonisation of some rules could be sensitive, but that the EMF "has always supported removing the obstacles to cross-border activity in mortgage lending". In its Green Paper on mortgage credit, published yesterday, the Commission makes several suggestions for harmonising the EU's approach to mortgage lending. Most are based on the recommendations made by the forum group on mortgage credit in December last year. These include common information to be given to consumers so that they can compare offers given by companies in any member state as well as harmonising early repayment rules and the calculation of annual percentage rate (APR). The paper also touts the idea of introducing a 'European mortgage' under the so-called 26th regime, whereby a separate scheme is introduced in addition to the ones implemented in the 25 member states. Interested parties have until the end of November to comment on the suggestions and a hearing will take place in December. McCreevy insisted that the Commission would only legislate if the benefits clearly outweighed the costs. "In this particular area there may not be a strong demonstrable case for doing so," he said. The Commission will publish a cost/benefit study at the beginning of August. Article takes a look at the European Commission's Green Paper on Mortgage Credit in the EU, published on 19 July 2005. |
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| Source Link | http://www.european-voice.com/ |
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| Subject Categories | Business and Industry, Geography, Internal Markets |
| Countries / Regions | Europe |
