The standard home loan agreement that the banking community is working on constructing is not the right solution to the problem of legal risks of home loans, according to Financial Supervision Commission (KNF) chairman Jacek Jastrzębski.
“I am not saying that it [the standard mortgage contract] is wrong, but that is not the fundamental question. The question is: what should be the model of the mortgage market. I’m not denying the point of creating a standard contract, whereas it [the market model] is the place for discussion,” Jastrzębski said during the session “How to reduce the legal risk of home loans” during the 13th European Financial Congress in Sopot. ISBnews is a media patron of the Congress.
“We are using the wrong tools to solve the problem. This is not a contractual issue. It is a consequence of shaping a certain model of lending when it comes to mortgages. The fact that this comes back to us in the form of legal risk is not due to the design of the contract,” He added.
For several months, the banking community (including the Responsible Finance Club of the EKF) has been working on creating a standard home loan contract that could not be accused of containing abusive clauses.
As explained by a participant in this work, managing partner at Ernst & Young Law Tałasiewicz i Wspólnicy Zuzanna Zakrzewska, the issues dealt with by the working group set up for this purpose: are the bank’s information obligations towards the client, interest rates and the use of reference indices, compensation for early repayment of a fixed-rate loan, modification clauses and the issue of simple language with which contracts should be drafted.
Source: KNF and ISBnews
Photo: Jacek Jastrzębski – KNF
