The European Commission (EC) urged Spain to “enact EU rules on mortgage credit” and to “fully transpose EU-wide rules on mortgages”. “If these Member States fail to act within two months, they may be referred to the Court of Justice of the EU”, the EU executive said this Thursday. The warning was extended to eight more countries Croatia, Cyprus, Finland, Greece, Luxembourg, Portugal, Slovenia and Sweden. Member States had to implement these rules in their national law by the 21st of March 2016, but having missed the original deadline, the EC warned them through letters of formal notice last May. The Mortgage Credit Directive (Directive 2014/17/EU), which was adopted on 4 February 2014, aims to “improve consumer protection measures across the EU by introducing EU-wide responsible lending practices”.
Brussels (CNA).- The European Commission (EC) has given Spain two months to implement the regulations of the European Union on mortgages if it wants to avoid going to court. The EC warned this Thursday that Spain and eight more states did not meet the deadline to incorporate the law into their legislation, which was the 21st of March 2016, and ignored a first warning given last May by the EC through a formal letter. “If these Member States fail to act within two months, they may be referred to the Court of Justice of the EU”, the EU executive said. The regulation on mortgages (Directive 2014/17/EU) was adopted in February 2014 and “aims to improve consumer protection measures across the EU by introducing EU-wide responsible lending practices”.
The European Commission urged Spain, Croatia, Cyprus, Finland, Greece, Luxembourg, Portugal, Slovenia and Sweden to implement EU rules on mortgages. According to the EC, “it is essential to improve the mortgage rules as it will boost confidence in the mortgage market and increase choice for consumers”.
Furthermore, the law will guarantee that citizens have “clearer and understandable information” on mortgages thanks to the introduction of a ‘European standardised information sheet’ (ESIS), which will allow borrowers to “understand better the risks” associated with their mortgage agreement as well as “compare offers and shop around for the best product to suit their needs at the best price”.
The Directive the EC urges Spain to fulfil also wants to protect the most vulnerable consumers and ensure that they will be “better protected from over-indebtedness” through European standards for assessing the creditworthiness of mortgage applicants. In addition, the law also establishes some “principles for the authorisation and registration of credit intermediaries”, which will have to comply with “the new business conduct rules”.
The first European Directive on Mortgages was approved at a time when social entities such as the Platform for People Affected by Mortgages (PAH) were putting pressure on the Spanish Government to carry out a change. The rule also prevents Member States from opposing a deed of assignment on payment /payment on account if both the bank and the owner agree.
