EU standards on mortgage loans to better protect consumers

“I am greatly satisfied with the agreement reached yesterday during the trialogue with the European Council and the European Commission on the Report on ‘Credit agreements: residential property’. This will introduce European-wide standards for the granting of mortgage loans for the first time”, said Alfredo Pallone MEP, EPP Group Shadow Rapporteur and Member of the Economic and Monetary Affairs Committee of the European Parliament.

“The 2008 crisis originated from unfair practices of US banks in granting loans without checking on the consumer's ability to repay. Similar situations have been seen in Europe with the outbreak of the housing bubble in Spain and Ireland, with disastrous consequences for the entire economic system as a whole. This Directive will encourage responsible lending practices with greater protection for consumers who will be better informed and more aware of the risks they face”, explained Pallone.

“I am pleased that the final text of the Directive has maintained both the right for the consumer to pay off the mortgage earlier and the right to benefit from a period of 7 days before being bound by a contract, on which I worked hard during the whole period of the negotiations”, concluded Pallone.