The Groups focused on the issues of pan-European mortgage funding and consumer protection and were brought together by the European Commission to examine the case for further integration.
The Mortgage Funding Expert Group (MFEG) was set up to identify, classify and prioritise barriers to integration for funding models, and consider and justify possible solutions. The Mortgage Industry and Consumer Dialogue group was tasked with exploring the following issues: information, advice, early repayment and APRs. This included examining whether the voluntary code in Europe was still relevant, and considering at what point the European Standardised Information Sheet (ESIS) should be given out to the customer. It also considered what is meant by ‘advice’, who should provide it, and to what standards.
Vanessa Moore, policy adviser at AMI, commented: “The Commission’s White Paper on Mortgage Credit is due in June this year, and we have been clear in our response to these reports that any European-wide intervention by the Commission should only take place where it has clearly been demonstrated that the market is unable to deliver change through a non-legislative, industry-led process. AMI also firmly believes that any specific proposals must be made alongside a full cost-benefit analysis.
“We do not believe that, in general, consumers currently have an appetite to shop cross-border to meet their mortgage needs. It is AMI’s belief that the diversity between member states means that harmonisation of consumer protection rules would not deliver greater integration of the mortgage market. We do not believe there is sufficient evidence of consumer detriment to justify the risks of regulatory intervention beyond that at a national level.
“It is more likely that integration will begin where lenders decide to enter markets at a national level in other member states. In AMI’s view, the true barriers to integration of the mortgage market are those which prevent lenders from entering into mortgage contracts with individual consumers in another member state. Barriers such as land registration procedures, accessing land registration data for foreign lenders, the lack of a common approach to property valuation, and the existence of product restrictions in certain member states, such as caps on interest rates or early repayment charges. The Commission should consider working with the industry to try to find ways to remove these barriers without the need for regulatory intervention.”
Members can read AMI’s full response to the Discussion Paper by visiting: http://www.a-m-i.org.uk/closed/cug/default.asp
