After long negotiations the European Parliament's Economic and Monetary Affairs Committee voted today on a first reading the report on credit agreements relating to residential property which prime goal is, according to ALDE spokesperson MEP Philippe De Backer (OpenVld, Belgium): "to better protect consumers".
"The reforms we introduced reflect the changes the pattern of home ownership in Europe was forced to go through due to the contribution the mortgage market had to the crisis. Too often consumers suffered from a lack of understanding of the possible implications when contracting a mortgage mainly due to a lack of clear information and transparency. That's why we primarily wanted to ban unclear and too often obfuscated information. No more unclear advisory service, no more products incomparability, no more hidden costs or clauses. Consumers must be put in a position to better assess the risk when stepping into a life long commitment", said ALDE spokesperson raising as an example the confusion consumers often faced already to clearly distinguish from who was trying to sell them a mortgage or giving them advice.
"No more one contracting formula fits all as well. Consumers' needs must be listened. A loan should be tailor-made on their real capacity. A win-win formula for both consumers and lenders is also to allow flexibility of the credit agreement, in order to better manage the possible changes in risk and circumstances during the loan life", stressed Mr De Backer.
By acknowledging the enormous difference between mortgage markets within the EU and the recent tendency to deny lending, he continued: "We respect local differences but given that we are in a single market, we wanted to harmonise the pre-contractual information, which should respect the same high level all across Europe and to oblige to undertake a creditworthiness assessment which would ensure the sustainability to meet the contracted obligations".
"Needless to say that more information, transparency, product comparability will enhance competition and favour cross-borders trade", Mr De Backer concluded.
