Mortgage offers to come with cooling off period
Speaking at the Financial Services Expo, Lynda Blackwell, manager of mortgage policy, outlined the new rules giving borrowers the right to reconsider their decision.
She said: “The directive gives member states two options of how they implement this new stage; a reflection period before the signing of the agreement or a right of withdrawal after the signing.”
But borrowers can choose to waive the reflection period if they are in a hurry to complete the transaction but lenders will have to deal with those who do not wish to waive this option.
The news follows Blackwell’s earlier announcement that lenders will be unable to withdraw a credit agreement with a borrower on the grounds that the information they received during the application process was incomplete raising concerns that this was lengthen the information gathering process.
She said: “If you were a lender how would you obtain this degree of comfort? This could amount to a significant delay in the sales process.”
The final version of the directive is due to be published in November this year and the UK has two years and 20 days in which to implement it.