Friday, May 16, 2014
Non-recourse mortgages coming soon?
A change in mortgage rules being debated by the European Commission to allow borrowers to walk away from a property if they canÃ¢Â€Â™t repay the loan could push up the cost of borrowing for everyone. Although the UK mortgage market has already been subject to stricter lending rules under the recently implemented Ã¢Â€Â˜mortgage market reviewÃ¢Â€Â™ (MMR) Ã¢Â€Â“ which has introduced tougher affordability criteria for home loans Ã¢Â€Â“ the commissionÃ¢Â€Â™s Ã¢Â€Â˜mortgage directiveÃ¢Â€Â™ plans to change the rules again. At the heart of the directive is the commissionÃ¢Â€Â™s concerns about over-indebtedness in Europe and how it should be tackled. In order to find a solution for those unable to repay loans, the commission has put forward the idea of Ã¢Â€Â˜non-recourse loansÃ¢Â€Â™.