30 June 2012

EMF: Mortgage Info June 2012

The June 2012 edition of the European Mortgage Federation's monthly newsletter covers the following topics: CARRP Proposal - On The Right Track; Over-Indebtedness Questions Gathering Momentum; Covered Bond Market Dominated by Macro Topics.

CARRP Proposal: On the Right Track

After numerous delays and much political wrangling, the European Parliament’s (EP) Committee on Economic and Monetary Affairs (ECON Committee) adopted its Report on the Commission’s Proposal for a Directive on Credit Agreements Relating to Residential Property (CARRP) during a vote on the 7th of June 2012. The stated goal of the proposed Directive is to integrate the EU mortgage market and enhance consumer protection.

Overall, the final draft ECON Report appears to strike a sensible balance between protecting consumers on the one hand and ensuring that the mortgage business remains viable on the other. A viable mortgage industry in concrete terms means a legal environment in which lenders are able to continue providing low-cost access to homeownership to the population, which is an important factor of economic stability.

Over-Indebtedness Questions Gathering Momentum

With the economic crisis at the forefront of their minds, the attention of policymakers is increasingly focused on the issue of household over-indebtedness and how it can be tackled. In parallel to ever-present debates at national level, policymakers at EU level are also gathering information on the means to help consumers in financial difficulty. Both the European Commission - DGs Health & Consumer Protection and Internal Market - and the European Banking Authority (EBA) are currently undertaking research in this area.

Although legislation providing for consumer protection in cases of potential foreclosure in conjunction with lender forbearance schemes is widespread throughout the EU, the over-indebtedness question is continuously picking up speed. Despite the fact that these developments at EU level are still in the research phase, it is an inevitable truth that the law follows politics and as such, it is logical to conclude that these Studies (especially that of DG Internal Market) could very well be precursors to a proposal for either soft or hard law in the area of over-indebtedness at some future point, with personal bankruptcy and/or datio in solutum featuring as a part of this.

Covered Bond Market Dominated by Macro Topics

By Bernd Volk CFA, Head of Covered Bond Research, Deutsche Bank, discusses the following:

• Historically low public issuance of EUR denominated covered bonds
• Low issuance of EUR benchmark covered bond
• Public sector covered bonds declining further
• Covered bonds’ ratings remain in focus
• High volume of retained cédulas
• Bail-in concerns support covered bond demand

News in Brief

• EMF Annual Conference: Registrations Open Soon – Early Bird Fee until the 15th of August 2012
• Coming Soon: A New EMF Study on Mortgage Interest Rates
• ECBC Covered Bond Label: Support of Investment Banks

Agenda

Full Mortgage Info

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