New mortgage regulation considered by EC

The press is already buzzing over the news about the new regulation currently under consideration by the European Commission. It will give potential borrowers an obligatory 10-day period for second thoughts on making financial commitments.

It is hoped that the regulation in question will stimulate more people to do a thorough research before signing on a dotted line.

Moreover, borrowers would also be motivated to reflect on the option of choosing foreign mortgage lenders.

The regulation is being considered as part of a mortgage credit directive to be brought into effect in 2011, the major aim of which is to make European mortgage markets standardized and promote cross-border lending.

Nevertheless, the Council of Mortgage Lenders (CML) stated that such legislation would not achieve its aim on the UK market as most mortgage deals are settled through brokers.

On the other hand, since loans in the French market, for instance, come at a considerably lower interest rate than UK home loans, French lenders could put UK lenders in an unfavourable position.

The figures from the Intermediary Mortgage Lenders Association show that more than 60 per cent of mortgage deals are arranged in the UK by mortgage intermediaries.
 


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