While the dialogue between consumer and industry representatives was inconclusive, the CML felt the funding report was extremely useful and suggested some practical, targeted measures that the CML wholeheartedly supports.
The mortgage funding expert group takes as its starting point that no one funding system should have regulatory advantage over another. It proposes achieving greater integration through market liberalisation measures, an approach that the CML welcomes. Its position is that: "European mortgage funding markets are already relatively efficient. Targeted measures can, however, further improve their operation leading to greater integration ... a market-based, deregulated approach is best able to provide efficient markets, deliver maximum choice and best pricing for the consumer".
Its specific proposals include:
- Creating a 'passport' system for lenders authorised in one member state to undertake business in others without unnecessary restrictions (for example, the requirement in Germany to hold a banking licence);
- Promoting greater transparency on areas such as the costs of prepayment (early repayment); property valuation methods and terminology; and greater standardisation of reporting to funding investors;
- Promoting measures to integrate the European infrastructure for mortgage lending in areas such as cross-border access to credit databases and land registries.
The CML believes that the European Commission should take significant account of the funding report as it drafts its White Paper on mortgage market integration, due to be published in June.
Michael Coogan, CML director-general, commented: "The funding report outlines a very welcome practical set of measures that we hope the Commission will fully endorse in its White Paper when it emerges. It is right to see liberalisation, rather than further regulation, as the way to achieve more choice and better pricing in European mortgage markets."
