A committee scrutinising the European Union’s mortgage directive has resurrected the idea of a 14-day cooling-off period for borrowers after a mortgage offer has been made.
Plans for a 10-day cooling-off period were considered by the European Commission when it first began to formulate draft proposals for the mortgage credit directive.
But in January, it emerged that the EC was no longer considering the proposal and the EC’s draft directive, published in March, did not include plans for a cooling-off period.
The next stage in the process was for two separate committees of the European Parliament – the economic and monetary affairs and the internal markets and consumer protection committees – to report on their reaction to the proposals.
The report also suggests that member states should be required to regulate how lenders and intermediaries are paid, with a ban on commission
The Econ committee’s report, which was published last month, includes proposals for the introduction of a cooling-off period for borrowers of at least 14 working days after a mortgage offer has been made and compensation for consumers if credit is rejected because a reference agency supplies an inaccurate report.
It also suggests borrowers should be able to make overpayments without penalty, a ban on arrears charges if payment problems arise and a requirement for advisers to disclose the varying level of commission they will receive for individual products in all cases.
The Imco report is expected to be published in September.
Your Mortgage Decision director Dominik Lipnicki says: “I do not think the cooling-off period will make any difference to consumers unless it is after completion. This is just a case of the EU not really und-erstanding the UK mortgage market.”