New EU Agreement on Mortgage rights
An agreement has been reached between the Irish presidency, the European Parliament and the European Commission on the new Mortgage Credit Directive.
This new agreement will standardise regulations for European consumers as well as for banks and credit institutions in the EU. This agreement will bring together the set of standards for everyone. It includes:
1. Increased pre-contractual information available
Consumers will receive an ESIS (European Standardised Information Sheet) which will help them identify the credit offer which can satisfy their needs as well as point out the risks of foreign currency loans and variable rate loans.
2. Measures against misleading advertising
This will ensure that credit providers do not offer loans under false pretenses. There will also be rules in place to stop the leading lenders taking excessive risks when providing mortgages in order to receive bonuses.
3. Period of reflection:
Borrowers will be allowed period of reflection whereby they have the ability to withdraw before being bound by a contract.
4. Lenders must be reasonable:
This basically means that banks and credit institutions will have to be fair when dealing with borrowers who have come into difficulty whilst repaying their mortgages.
Minister for Finance Michael Noonan was glad these new regulations were imposed:
“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. This is another important result for the Irish Presidency on financial services, contributing to our overall aim of enhancing consumer protection.”
Although this new agreement only applies to mortgages which are issued after the directive comes into effect which isn’t expected until mid 2015. 4pm would like to hear your thoughts on this new agreement? Is this new agreement enough? What about the mortgage holders who are in difficulty now?