The forces of Europe are gathering against the laisser-faire attitude that led to so many toxic loans being dished out at the height of the credit bubble. Likely to publish a Directive shortly on the topic of “Responsible Lending and Borrowing” the EU is anxious to promoting a single market in mortgage lending and to disinfect a sector that had become afflicted by dubious practices. The medicine will likely include:
Minimum competence requirements for staff involved in selling loans; standardised information about the terms and effect of loans; transparency around mortgage brokers fees; an obligation to carry out a “robust” assessment of the Consumer’s ability to repay and to match the Consumer to the product. Finally, Borrowers themselves will be under a stricter obligation to provide “complete and correct information on their financial and personal circumstances”. Expect the medicine to provoke squeals of pain from Euro sceptics and the mortgage sector alike.