This is the report of the Forum Group on Mortgage Credit, which brought together a range of European mortgage and consumer representatives to identify the obstacles to an integrated European mortgage market, and how they might be addressed.
The report makes 48 recommendations on the five main themes of consumer confidence, legal issues, collateral issues, distribution issues and finance. However, it is notable that some of the recommendations represent only the views of the consumer representatives, while others represent only the views of the industry representatives. This suggests that consensus about the best way to proceed still remains elusive on some aspects.
Nevertheless, the CML believes that despite these differences of view, the report also brings out a powerful list of useful action points on which the whole group could agree. These cover aspects such as the need to introduce clarity on the use of databases, clarify the approach to valuation of property, benchmark forced sale procedures across all member states, ensure the operation of effective property registers to record all charges on property, introduce a supervisory system across Europe for mortgage intermediaries, address tax distortions that penalise foreign lenders, and take various steps to assist the development of securitisation.
Michael Coogan, CML Director General and a member of the Forum Group, commented: "If the Commission can remove the obstacles identified in the report, this will deliver benefits to lenders and consumers across Europe. Previous research shows how competitive and vibrant the UK mortgage market is when compared to our European counterparts, so we have little to fear and much to gain from integration.
"But this does not mean that further layers of EU legislation are necessarily the answer. Indeed, part of the current problem is the lack of clarity within the Commission between the Consumer Protection Directorate-General and the Internal Market Directorate-General about which has primary responsibility for mortgage market policy, and this is resulting in confused legislative proposals. As a first step the European Commission should exclude all secured loans from the proposed Consumer Credit Directive (as the European Parliament recommended), as a precursor to agreeing its own internal policy on mortgages."