McCreevy not to back single mortgage plan

EU Internal Market Commissioner Charlie McCreevy will not propose a mandatory shake-up to create a single mortgage market when he unveils his long-delayed policy paper in December, an industry source said yesterday.

Mr McCreevy met his officials last Thursday and decided his White Paper should contain only options for further debate, effectively kicking the issue into the long grass for now.

"He said that in the White Paper the Commission should not indicate any specific proposals," the source said.

"If there will be any new proposals later on, he indicated there should be a new impact assessment done by the Commission," the source added.

"It shows the commissioner does not see a need to do anything on the mortgage market. Also that it may be a sensitive issue in states like Britain and Spain, and also with what's going in the United States," the source said.

Problems with the subprime mortgage market - which offers loans to people with a poor credit history - led to a global credit squeeze over the summer.

A White Paper normally puts forward proposals for final consultation. It has already been put back several months as no real consensus emerged over what should be done or how.

The European Commission has consulted on whether it should propose mandatory EU rules for mortgage markets or beef up an existing voluntary code of conduct.

Other industry officials welcomed Mr McCreevy's decision not to push ahead with mandatory regulation.

"This does not come as a surprise.

"The White Paper has been postponed for the last two years every six months or so.

"After a wide consultation, it's not clear what they can really do," said Annik Lambert, secretary general of the European Mortgage Federation.

Some question whether the EU should try to create an EU loans market when cross-border mortgages represent only 1 per cent of the total.

Mr McCreevy has said the mobile mortgage consumer was a myth but wants to make it easier for lenders to offer loans anywhere in the bloc.

A study for the Commission said better integration of mortgage markets would be worth €94.6 billion over 10 years, raise EU economic growth by 0.7 per cent and boost private consumption by 0.5 per cent. - ( Reuters)