Brussels, 02/09/2011 (Agence Europe) - On Wednesday 31 August, the MEPs on the European Parliament's economic and monetary affairs committee discussed the draft report by Antolín Sánchez Presedo (S&D, Spain) on the draft directive on mortgage lending in the European Union (see EUROPE 10348). The rapporteur suggests a big expansion in the scope of the directive. “We have put in three new chapters. One is on financial education and what people have to know before taking out a mortgage. Then we look at what happens once people have signed a mortgage contract. We call this sound performance of credit. The last new chapter is on market transparency. The idea here is to facilitate the traceability of each mortgage and create, for example, a register for mortgages. Once you pool them to create financial instruments, you would know at any moment what kind of mortgages are in the pool. That would make markets much more stable”, said the rapporteur in an interview on the European Parliament's website.
In order to give consumers greater protection, the draft report provides details about information that must be communicated to borrowers before they sign a mortgage deal and urges member states to organise awareness-raising campaigns. Once a mortgage contract has been signed, there are measures covering early repayment, changing the borrower and converting a loan in a foreign currency into a loan in the national currency. The measures aim to reduce market concentration (the five biggest mortgage lenders in each EU member state issue more than 75% of mortgages). (M.B./transl.fl)