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Mortgage Credit Directive Article 19 Property valuation

Malahide General Assembly Item V AUTOMATED VALUATION MODELS – THE LIMITS ON THEIR USE SET BY STANDARD SETTERS, EBA, FSB AND EU LAW. The Dutch Decree of 30 June 2016 allowing the use of ‘pure’ AVMs in the event that the mortgage amount is lower than 90% of the value of the residential property

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Mortgage Credit Directive Article 19 Property valuation

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  1. Malahide General Assembly Item VAUTOMATED VALUATION MODELS – THE LIMITS ON THEIR USE SET BY STANDARD SETTERS, EBA, FSB AND EU LAW The Dutch Decree of 30 June 2016 allowing the use of ‘pure’ AVMs in the event that the mortgage amount is lower than 90% of the value of the residential property EU legal and political aspects Michael MacBrien TEGoVA Secretariat

  2. Mortgage Credit DirectiveArticle 19Property valuation 1.   Member States shall ensure that reliable standards for the valuation of residential immovable property for mortgage lending purposes are developed within their territory. Member States shall require creditors to ensure that those standards are used where they carry out a property valuation or to take reasonable steps to ensure that those standards are applied where a valuation is conducted by a third party. Where national authorities are responsible for regulating independent appraisers who carry out property valuations they shall ensure that they comply with the national rules that are in place. 2.   Member States shall ensure that internal and external appraisers conducting property valuations are professionally competent and sufficiently independent from the credit underwriting process so that they can provide an impartial and objective valuation, which shall be documented in a durable medium and of which a record shall be kept by the creditor.

  3. MCD Recital 26 It is important to ensure that the residential immovable property is appropriately valued before the conclusion of the credit agreement and, in particular where the valuation affects the residual obligation of the consumer in the event of default. Member States should therefore ensure that reliable valuation standards are in place. In order to be considered reliable, valuation standards should take into account internationally recognised valuation standards, in particular those developed by the International Valuation Standards Committee, the European Group of Valuers’ Associations or the Royal Institution of Chartered Surveyors. Those internationally recognised valuation standards contain high level principles which require creditors, amongst others, to adopt and adhere to adequate internal risk management and securities management processes, which include sound appraisal processes, to adopt appraisal standards and methods that lead to realistic and substantiated property appraisals in order to ensure that all appraisal reports are prepared with appropriate professional skill and diligence and that appraisers meet certain qualification requirements and to maintain adequate appraisal documentation for securities that is comprehensive and plausible. …

  4. The rest of the Directive • Financial education of consumers • Conduct of business obligations for banks • Obligation to provide info free of charge • Standard info to be included in advertising • Pre-contractual information • Calculation of the APRC • Standards for advisory services • Foreign currency loans • Variable rate credits • Early repayment • Info concerning changes in the borrowing rate • Arrears and foreclosure

  5. Last Chance Saloon The European Parliament Committees that worked on the Directive: Economic and Monetary Affairs Committee Internal Market and Consumer Protection Committee

  6. AUSTRIA Othmar KARAS Michel REIMON Josef WEIDENHOLZEN

  7. FRANCE • Pervenche BERÈS • Alain CADEC • Pascal DURAND • Sylvie GOULARD • Eva JOLY • Philippe JUVIN • Alain LAMASSOURE • Emmanuel MOREL • Robert ROCHEFORT • Virginie ROZIÈRE

  8. GERMANY • Jan Philipp ALBRECHT • Burkhard BALZ • Udo BULLMANN • Birgit COLLIN-LANGEN • Markus FERBER • Evelyne GEBHARDT • Sven GIEGOLD • Werner LANGEN • Thomas MANN • Julia REDA • Andreas SCHWAB • Peter SIMON • Jutta STEINRUCK • Michael THEURER • Sabine VERHEYEN • Jakob von WEIZSÄKER • Kerstil WESTPHAL

  9. GREECE Eva KAILI Georgios KYRTSOS Dimitrios PAPADIMOULIS Theodorus ZAGORAKIS

  10. IRELAND Matt CARTHY Nessa CHILDERS Marian HARKIN Brian HAYES

  11. LATVIA Krišjānis KARIŅŠ Inese VAIDERE Roberts ZĪLE

  12. POLAND • Dariusz ROSATI • Adam SZEJNFELD • Rosa GRÄFIN VON THUN UND HOHENSTEIN • Danuta HÜBNER • Danuta JAZLOWIECKA • JACEK SARYASZ-WOLSKI

  13. PORTUGAL José Manuel FERNANDES Maria João RODRIGUES Pedro SILVA PEREIRA Manuel dos SANTOS

  14. ROMANIA • Christian-Silviu BUSOI • Andi CRISTEA • Doru-Claudian FRUNZALICA • Maria GRAPINI • Catalin Sorin IVAN • Siegfried MURESAN • Theodor Dumitru STOLOJAN • Mihai TURCANU

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