The European Commission’s White Paper and what it has in store will feature high on the agenda of the 4th Congress on Residential Property Financing in Central and Eastern Europe to be held on November 29 and 30 in Jachranka near Warsaw.  The Congress will be organized by the Committee for Property Financing of the Polish Bank Association in cooperation with the European Mortgage Federation (EMF). This meeting will be another regular annual event bringing together property market institutions and agents operating in Central and Eastern Europe. It will be primarily designed to integrate undertakings and exchange expertise to bring about a more dynamic development of the property financing market in this part of the world. The Congress is to be attended by more than 150 experts from Poland and abroad representing the banking and insurance markets as well as developers and real property agents.
Regulations presently considered by the European Commission are of essential importance for several reasons. They will first of all lay down the terms of granting mortgage loans for individual customers, define advisory service rules, specify the functioning of credit agents, loan restrictions and early debt repayment terms as well as outline interest rate change policies.
Financial institutions in Poland expect that the White Paper will impose rigorous requirements on lenders and at the same time define limits on what customers may demand. The European Commission has been facing a big dilemma of how to meet the expectations of both since these are not always compatible and understood.
The first area of the European Commission’s regulatory proceedings to be reflected in the White Paper covers information. Customers take decisions on entering into a mortgage contract on the basis of information received. Hence the importance of that issue.
The Code of Good Practice is another important matter. In most “old” EU countries such a code has been voluntarily adopted to complement legislative solutions in respective countries. The Code has not been introduced in Poland but legislative procedures in force in this country – relating for instance to consumer credits – provide for far more rigorous solutions.
The issue of advisory service schmes and credit intermediation is also a major issue of the European Commission’ concern. In view of the nature of mortgage loans – being as they are complex and high value products – customers tend to seek advice more frequently then in the case of other financial products. But it is not yet sufficiently clear how the matter of advisory services should be approached. 
The fourth main issue requiring a solution by the Commission applies to early credit repayment schemes. This is one of the most essential aspects of mortgage credit transactions. Surely, the parties concerned differ on how early credit repayment principles should be settled. The systems in this respect vary from country to country. Bank experts hold the view that the right to early repayment should be defined by the terms of the respective credit agreement rather than by law. Consumer organizations, on their part, argue that the issue should be governed by appropriate legislation.
These and many other important issues raised in the European Commission’s White Paper on Mortgage Credits are to be thoroughly reviewed at the Congress in Warsaw.

(HK)