12 December 2014

EBA consults on treatment of mortgage borrowers in arrears

The Guidelines establish requirements in terms of policies and procedures, engagement with consumers, provision of information and assistance to consumers, resolution process and documentation of dealings with consumers and retention of records.

The EBA published a consultation paper on draft Guidelines on arrears and foreclosure under the Mortgage Credit Directive (MCD). The public consultation will run until 12 February 2015.

As foreclosure can have significant consequences for consumers, creditors should implement measures to attempt to resolve with the borrower any payment difficulties before initiating foreclosure proceedings. These draft Guidelines will ensure that such measures are developed and adopted consistently across the European Union.

The MCD sets out provisions in the area of arrears and foreclosure, and specifically requires that Member States adopt measures to encourage creditors to exercise reasonable forbearance before they initiate foreclosure proceedings.

To ensure that the high-level provisions of the Directive are implemented and supervised consistently across the EU, the EBA is consulting on draft guidelines that provide greater detail on how creditors across the EU should give effect to the relevant MCD provisions.

The EBA expects to publish the final guidelines in Q2 2015. These would apply from the transposition date of the MCD of 21 March 2016. Comments to this consultation can be sent to the EBA by 12 February 2015.

Press release

Consultation paper

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