Proposal for a Directive of the European Parliament and of the Council on Credit Agreements Relating to Residential Property
| Date Published | 5/30/2012 |
| Author | Marja Hoek-Smit |
| Theme | Housing Finance Policy |
| Country |
European Council’s
Proposal for a Directive of the European Parliament and of the Council on Credit
Agreements Relating to Residential
Property
The
objective of this Directive (full document) is to ensure that credit agreements relating to
immovable property provided to consumers benefit from a high level of
protection. It therefore applies to credits secured by real estate, regardless
of the purpose of the credit, credit agreements which are used to retain rights
in property or land, or credits which are used to purchase a property in some Member
States.
The directive
includes details on the calculation of annual percentage rate of change (APRC) and
the costs that can and cannot be included in that figure; obligations on
assessing the creditworthiness of the borrower and disclosure obligations on
the part of the consumer. It further stipulates that each member state shall
ensure non-discriminatory access for all creditors from all member states to
databases to assess creditworthiness of consumers, both private and public. It
sets standards for advisory services to the consumer, and statutory and
contractual rights of the consumer to discharge his obligations under a credit
agreement prior to the expiry of the agreement. It stipulates requirements for
the establishment and supervision of credit intermediaries and appointed
representatives and non-credit institutions and cooperation obligations between
competent authorities of different member states and the settlement of
disagreements.