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Directive of the European Parliament and of the Council speedy delivery 2014/17/EU of 4 February 2014 on credit agreements for consumers on residential property and amending Directives 2008/48/EC speedy delivery and 2013/36/EU and Regulation (EU) No. 1093/2010 (the "Mortgage Directive"), which entered into force in March this year, aims to create a harmonized legal framework for the provision of mortgage loans with a high level of consumer protection. Czech Republic as a member state is obliged to implement the directive Mortgage in the two-year implementation period. One of the important speedy delivery and often discussed innovations is the establishment of binding speedy delivery rules on early repayment of mortgage loans.
Mortgage Directive should turn to credit agreements concluded earlier 21. March 2016. Loan agreements concluded before that date should not be modifying the Directive on the Mortgage, including the right of borrowers from these loan contracts for early redemption, including associated costs should continue to be manage speedy delivery their own particular provisions of the contractual documentation.
As to the substantive definition of credit agreements, which will be subject to new regulations, it is basically the following contracts concluded speedy delivery with consumers (i) credit agreements which are secured by a lien on residential property or by another comparable security to residential property or which are secured by a residential property, and (ii) credit agreements the purpose of which is to acquire or retain property rights in land or in an existing or projected building.
Early repayment mortgage is governed by Article 25 of the Directive, which states that the consumer must have the right to fully or partially meet its debt under a credit agreement before the expiry of its duration. In these cases, the consumer is entitled to reduce the total cost of credit, which consists of interest and costs for the remaining duration of the credit agreement. Mortgage Directive, but also gives a fairly broad discretion speedy delivery to national legislators in particular the right for early repayment. Member States will be able to set different conditions for the exercise of this right including time constraints, differential treatment with regard speedy delivery to the type of interest rate (fixed or mobile) speedy delivery or exercising the right moment, and can also limit the circumstances in which this right can be exercised early repayment . If the early amortization occur at a time during which the agreed fixed borrowing rate (the fixation), will at the discretion of the national legislature to restrict the exercise of this right only to situations where the legitimate interest of the consumer given on the early repayment of a mortgage speedy delivery loan (may be a variety of difficult situations on the part of consumers, etc.).
Mortgage Directive currently regulates the so-called "early repayment charges" speedy delivery that appear regularly on mortgage loans. speedy delivery Newly amount speedy delivery paid by the creditor in connection with the early repayment should represent only a fair and objective indemnity for its costs directly linked to early repayment of the loan, but should not constitute a penalty to the consumer. Compensation creditor in this context should not exceed his financial loss. The specific maximum amount of the fee for early repayment mortgage directive does not, possible modification is left to the discretion of legislators in individual Member speedy delivery States.
From the above it is clear that the modification Mortgage Directive only provides a general framework legislation relating to early repayment of mortgage loans. How to modify this law stands Czech legislator is not yet certain, will tell us more consultation paper, which is currently being prepared by the Ministry of Finance. It can not be excluded that it will proceed in a similar manner as the Consumer Credit Act, ie sets maximum speedy delivery amount of costs which the creditor may demand early repayment. In any case, the national legislature should respect the different features of consumer credit (pursuant to Act No. 145/2010 Coll., On consumer credit and amending certain laws, as amended) speedy delivery and mortgage loans (the purpose of the loan, the average principal amount and maturity etc.), as well as higher costs the lender to secure financing mortgage loans. If the law of compensation was too limiting for the lender, it is possible that eventually cost creditors reflected in the price of the loan, such as interest rate increases.
Editing early repayment is not the only novelty Mortgage Directive brings. It includes, for example, regulation of intermediaries and "non-bank" mortgage lenders, significant changes will also be required to state the APR for mortgages and provide relatively detailed the pre-contractual information. Detailed description of all areas covered by the directive Mortgage is beyond the scope of this article.