Currently two-thirds of the loans in portfolios are mortgages. The Directive will ensure that the mortgage credit providers meet new professional standards, and will encourage competition.
This Directive ensures that consumers will be guaranteed clear information and appropriate advice on loan proposals before they enter into what is often a lifetime commitment.
Commenting on the content of the decision, Liam Aylward MEP welcomed the increased protections for consumers: "Under this legislation property buyers will be better informed about the costs and consequences of taking on a mortgage, better protected from market swings and better protected if they cannot repay the loan. They will have the right to comparable information about the products available and the long-run financial consequences of taking out the loan."
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The increased supervision of mortgage sellers which aims to eliminate irresponsible lending is also a welcome move. Mortgage sellers should be authorised, registered and supervised by national authorities so that they meet strict professional requirements.
Ireland North West MEP, Pat the Cope Gallagher has welcomed the push from MEPs for protection in the Directive for consumers who seek to repay their loans early.
"Under this Directive the payment of penalties for early repayment would be prohibited which is a positive step. Crucially the Directive also requires creditors to apply reasonable forbearance when being confronted with homeowners in serious payment difficulties and to work with them to prevent over-indebtedness for long periods."
(CD)
