Tougher checks on home loans - "Banks will bear costs"


People taking out home loans will face tougher checks under new plans unveiled by Brussels.

The European Parliament’s Economic and Monetary Affairs Committee has approved proposals aimed at strengthening both the rights and obligations of consumers on mortgages.

According to these rules, those taking out a home loan will have to be scrutinised more closely to make sure they can repay their loans while banks and financial institutions will have to be clearer on the information they give to clients before lending them money.

The new rules also introduce a new cooling-off concept, where clients will be given a chance to change their mind.

The EU’s mortgage market is valued as €6 trillion or 52 per cent of the EU’s GDP. Malta’s banking sector is highly exposed to the mortgage market, which is estimated to make up the bulk of the island’s local banking business.

The aim of the new rules is to give consumers taking out mortgages greater protection. The main elements include a more efficient assessment of the borrowers’ credit worthiness so that only those who can repay the loan would get one. This will also reduce the banks’ potential losses while imprudent borrowers are spared bankruptcy. For the first time, prospective home owners would be entitled to a 14-day cool-off period so that they can change their mind about taking out a mortgage without giving any reason.

The cost of early repayments and risks of foreign-currency loans should be borne by banks, although the proposals specify that “fair and objectively justified” compensation for lenders must still be available.

The rules are expected to be adopted by the EP’s plenary session before endorsement by member states.

Source: The Times of Malta, June 13, 2012

Comments

Post a Comment

Popular posts from this blog

Fire safety regulations for apartment blocks to be proposed by CPD in coming weeks

Regulations will prevent fire incidents from escalating  The Civil Protection Department is in the coming weeks proposing a number of fire safety regulations for apartment blocks.  The measures follow recommendations in an inquiry led by Magistrate Joseph Mifsud following a fire at 77 “Waterways” Flat 3, Triq l-Aħmar, Marsascala, during which a man had lost his life. Six people had also been hospitalised.  They include that fire drills led by the administrator should be carried out in every apartment block, that each block should have fire extinguishers u fire blankets at a place that was visible and accessible and that there should be a smoke and fire detection alarm in the common area.  Other proposals are for emergency exit signage, easy accessibility to roofs, and that callers to emergency number 112 should give as much information as possible and identify a landmark for a faster response time.  These, the CPD said in a statement, were some of the measures that could be
Read more

Scheme to regenerate village core buildings launched

First-time buyers of scheduled buildings will be given a 70 per cent rebate on restoration works, thanks to a scheme launched this morning. The rebate, up to a maximum of €100,000, will cover facade and interior works, balconies, and even some forms of garden works. First-time buyers of property in Urban Conservation Areas meanwhile will be eligible for a maximum rebate of €10,000. The scheme, which will start on January 16, has an €18 million cap and is on a first-come first-served basis. Receipts must be provided. The Irrestawra Darek scheme was launched by the Planning Authority this morning to help with the regeneration of Malta's village core areas. The scheme was first announced by Finance Minister Edward Scicluna in the last Budget. The planning authority said it had reached an agreement with the Local Council Association to help councils provide residents with a conservation architect. Times of Malta online article here.
Read more

Environmental Indicators show sharp increase in construction waste

Waste generation in 2010 increased by 48% compared to the previous year, mainly due to a sharp increase in construction waste, a Mepa Environmental Indicators report issued today shows. The report says that construction and demolition waste had increased after having declined by 70% between 2008 and 2009. Municipal waste declined by 10 percentage point to 17.2% while hazardous waste declined from 4.8% to 2.5%. Mepa chairman Austin Walker said the increase in construction waste stemmed from a spike in building permits in previous years. He said the amount of waste which was was being recycled had increased from 4% in 2009 to 7.7% in 2010. The Environmental indicators also show that last year the number of permits issued for housing units declined from a high of 11,000 in 2007 to just 3,995 last year. Malta last year exceeded the EU standards on particulate matter in the air on a number of days, mainly in Msida, one of the areas having the heaviest traffic flows in Malta. Howev
Read more