The European Commission urged Spain, Croatia, Cyprus, Finland, Greece, Luxembourg, Portugal, Slovenia and Sweden to implement EU rules on mortgages. According to the EC, “it is essential to improve the mortgage rules as it will boost confidence in the mortgage market and increase choice for consumers”.
Understand the risks
Furthermore, the law will guarantee that citizens have “clearer and understandable information” on mortgages thanks to the introduction of a ‘European standardised information sheet’ (ESIS), which will allow borrowers to “understand better the risks” associated with their mortgage agreement as well as “compare offers and shop around for the best product to suit their needs at the best price”.
The Directive the EC urges Spain to fulfil also wants to protect the most vulnerable consumers and ensure that they will be “better protected from over-indebtedness” through European standards for assessing the creditworthiness of mortgage applicants. In addition, the law also establishes some “principles for the authorisation and registration of credit intermediaries”, which will have to comply with “the new business conduct rules”.
The first European Directive on Mortgages was approved at a time when social entities such as the Platform for People Affected by Mortgages (PAH) were putting pressure on the Spanish Government to carry out a change. The rule also prevents Member States from opposing a deed of assignment on payment /payment on account if both the bank and the owner agree.