Labour MEP Phil Prendergast has said that today’s approval of the first ever set of EU-wide standards regulating mortgage loans means borrowers will enjoy better protection, while adding stability to the overall economy.
Speaking following the successful vote to regulate a market that represents more than half of the EU’s GDP, Prendergast welcomed the new provisions and anticipated some of the benefits to consumers:
“Responsible mortgage lending standards will curtail risky behaviour on the part of creditors and borrowers alike.
“Consumers will have access to simple, comparable information on loan conditions and a period of reflection prior to being bound to a mortgage.
“Lenders must fully disclose the risks involved, particularly with variable rate loans, which are now more strictly regulated as well.
“Very importantly, fees on arrears will be limited to the costs incurred by the lenders, who must facilitate borrowers in arrears prior to foreclosure.
“We brought in a ban on tying approval to other financial products and imposed better conditions for early repayment.
“Ireland and the other Member States will have to follow this up with financial education initiatives.
“Coming from Ireland, I am only too aware of the painful consequences of irresponsible lending not only for the lives of individuals and families but also for the economy as a whole.
“While we need to curb incentives to speculation and provide alternative housing solutions, this is a good step forward to protect our families from over-indebtedness.”