The European Credit Directive was the recurrent theme last night at the Association of Mortgage Intermediaries (AMI) annual dinner, setting the stage for the draft proposals out in the Autumn.
AMI director, Robert Sinclair said: “Our European rulers have a harder job in not just managing the competing assertions of consumers, lenders and intermediaries, but replicating these across 27 member states. What I will say is that without a voice and presence in Brussels in the coming months and years, we risk failing to deal with the new decision making power base.”
Key note speaker Jennifer Robertson, from the European Commission, said AMI’ s representation from the UK had “made life that much easier.”
In Europe, the paper affecting the UK mortgage industry, ‘Credit agreements relating to residential property,’ or CARRP, is intended to bring “harmonisation in some areas and flexibility in others,” said Robertson.
The continent is already a European mortgage market, where foreign currency loans are rife in countries like Latvia and in Austria, 40% of mortgages are in another currency. Responsible lending is also a cross-border issue, she said.
“In the UK, the downturn has played a role, but certain products have been mis-sold, including self-certification, although Britain is the only country taking action.”
Robertson added that in Germany, 20% of all new lending was above 100% LTV, she said, but even so, Europe’s problems were never on the scale of the US, but we need to work at an EU level to unlock the single market’s potential, she said.
The proposals will become law in several years time, she said, adding, but “if we act, we can stop the kind of lending, which could lead to the next financial crisis.”
