New Mortgage Loans Act imposes stricter rules for evaluation of consumers

The government approved a new bill on real estate loans

A new Real Estate Loans Act, drafted by the government, will impose stricter rules of the evaluation of the credit status of the consumers applying for such loans. The Bill sets out detailed requirements according to which the consumers will be better informed about the offered mortgage loan products. The Council of Ministers approved the Bill today, announced the press office of the government.

The new law implements the requirements of the European Directive designated to establish effective European regulatory frame, which will contribute to the development of a more transparent, effective and competitive mortgage loans market in the EU. The target is to achieve high level of protection of the market participants – consumers, creditors and credit brokers. The Directive also aims to erase the differences in the regulatory framework between the EU Member-States and to enhance the cross-border loans offering in terms of trust and reliability of the market thus contributing for the financial stability.

The law provides for two main categories of loans – real estate mortgage secured loans and loans where the purpose of the financing is to acquire or keep a property right on a real estate. The law applies also to loans granted for repairs and renovations as long as they are secured with a mortgage.

The full publication is available in Bulgarian here:http://www.investor.bg/biudjet-i-finansi/333/a/nov-zakon-za-ipotechnite-krediti-zatiaga-pravilata-za-ocenka-na-potrebitelite-210215/

Source: www.investor.bg