For some 10 years now the European Commission has been keen to establish an EU-wide framework for regulating mortgages. In the maelstrom caused by the global financial crisis, the idea has gained further momentum and, at the end of March this year, the EC published a proposed directive concerned specifically with residential mortgages.
Apparently focused on consumer protection, the new proposal aims to standardise regulatory measures across the whole life cycle of a mortgage. And amongst its recommendations is a requirement covering both the minimum capital level and the amount of professional indemnity insurance to be held by lenders.
As reported on ftadviser.com, there doesn’t appear to be much in the proposal that isn’t already covered, in principle and in practice, by existing UK regulatory arrangements – meaning that if the directive were to be implemented, the UK mortgage lending industry would be likely to find new costs and burdens placed upon it with no corresponding increase in protection for consumers.
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