Kommission verwirft Regulierung der Hypothekenkredite[en] 

The worldwide market turmoil resulting from the US subprime credit crisis, which has shaken global markets since the summer, has demonstrated the crucial importance of mortgage credit markets.

Outstanding mortgage credit represents 47% of EU GDP, according to Commission figures, and therefore makes up a significant part of Europe's economy. For most Europeans, a mortgage is the biggest financial investment they make in a lifetime.

However, mortgage credit markets remain largely a local business, with only a small fraction (roughly 1%) of Europeans currently buying a mortgage across borders, which is likely to remain the case.

Nevertheless, the Commission estimates that by removing remaining market barriers, European consumers could benefit from reduced interest payable on a €100,000 mortgage loan of up to €470 per year.

The Commission on Tuesday (18 December) presented a much-anticipated White Paper on Mortgage Credit, which lays out a package of measures to "improve efficiency and competitiveness of EU residential mortgage markets". These objectives are to be achieved by:

• Facilitating cross-border supply;
• increasing the diversity of products;
• improving consumer confidence, and;
• facilitating customer mobility.

These non-legislative measures are notably aimed at tackling the issues of land registration, property valuation and forced sales procedures.

The Commission will undertake individual impact assessments to assess the need for legislation on key issues such as early repayment, which is a particularly sensitive aspect among member states, and test the water to see whether a compromise on a European regime is possible.

Nevertheless, the EU executive stopped short of proposing "hard" legislation in the form of a directive as foreseen in an earlier draft of the white paper. According to Conservative MEP John Purvis, this was watered down following a "controversy within the Commission", resulting in what seems "more like another green paper than a white paper".

The Commission says it has not completely ruled out proposing legislative measures in the future. However, talking to EurActiv, Commission spokesperson Oliver Drewes said that the EU executive would only regulate if "substantial advantages to a substantial number of consumers" were economically proven.

Internal Market Commissioner Charlie McCreevy wants to create a "more efficient and more competitive EU mortgage market where consumers can shop around for the best product for their needs, confident of the fact that their lender acts in a responsible manner."

However, the European Mortgage Federation (EMF) argues that EU mortgage markets are "already broadly efficient and competitive". Instead, since consumer mobility is likely to remain low, the focus should be put on removing obstacles for lenders crossing borders.

Andrew Heywood of the Council of Mortgage Lenders (CML) added: "We are particularly concerned that imposing further constraints on lenders will simply increase costs at a time of increased market uncertainty and reduce lenders' appetite for cross-border lending with no tangible benefits for consumers."

Conservative MEP and Vice-Chairman of the Parliament's Economic and Monetary Affairs Committee John Purvis thinks that mortgage lenders should have a responsibility to assess the ability of potential customers to repay a mortgage and so avoid the situation that was experienced in the wake of the US sub-prime crisis.

Purvis said that the Parliament is likely to expand on the Commission's ambitions, but added: "In the current disturbed state of the financial and mortgage markets, perhaps discretion outbids valour."

Liberal MEP and Economic Affairs and Competition Spokesperson Sharon Bowles said: "One hopes the member states do not repeat the mistakes of the mobile phone companies by not taking the threat of legislation seriously." 

Bowles added: "Commissioner McCreevy will rightly keep that option of legislation hanging over them."