FINANCIAL SERVICES : COMMISSION CONSULTS ON MORTGAGE CREDIT AHEAD OF 2007 WHITE PAPER.
The European Commission on 17 May launched a dialogue between the mortgage lending industry and consumer associations to reach a consensus on consumer protection measures. Parallel to this group, the Mortgage Funding Expert Group (MFEG) is already working on more technical issues with the industry. The Commission, currently following up on its Mortgage Credit Green Paper of July 2005, will take the conclusions of both groups into account before it comes up with its Mortgage Credit White Paper in 2007.
'We believe that a genuine attempt must be made to bring the positions of industry and consumers together [...]. This will not be an easy task, and much will depend on whether this group is able to reach workable compromises', said Internal Market Commissioner Charlie McCreevy.
Banks can often not offer cross-border loans because the market is fragmented and lenders do not have access to critical information. According to the Commission, this lack of information and other factors such as legal barriers and a low level of consumer confidence are hindering cross-border activity in mortgages from reaching its full potential.
The Commission says that an EU internal market for mortgage credit could offer many advantages to consumers, including more choice and lower interest rates and fees, while improving business opportunities for mortgage suppliers.
The Commission will host seven meetings between representatives of the mortgage lenders and consumer associations before the end of 2006, focussing on the controversial issues of information, advice, early repayment of the loan and the annual percentage rate (APR). The latter point is all about how mortgage lenders calculate the cost of credit that consumers pay.
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|Article Type:||Brief article|
|Date:||May 19, 2006|
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