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ANACOFI /ANACOFI IOBSP

1. Verification consumer’s income

1.1 The creditor should make reasonable enquiries and take reasonable steps to verify a consumer’s prospect to meet his/her obligation under the credit agreement including the consumer’s underlying income capacity, the consumer’s income history and any variability over time.

Yes we agree

1.2 The creditor should use necessary, sufficient and proportionate information, that can be evidenced and that is provided by sources that are independent of the consumer.

Yes we agree

1.3 In the case of consumers that are self-employed or have seasonal or other irregular income, the creditor should make reasonable enquiries and take reasonable steps to verify additional information that is related to the consumer’s ability to meet his/her obligations under the credit agreement, including profit capacity and third party verification documenting such income.

Yes we agree

2. Documentation and retention of information

2.1 The creditor should maintain complete documentation of the information that leads to mortgage approval, and maintain this documentation for at least the duration of the credit agreement.

Yes we agree, it seems a reasonable requirement

2.2 The creditor should ensure that a record with an adequate explanation of the steps taken to verify income is readily available for competent authorities. The record should at least document the income history collected for each applicant.

Yes we agree

3. Identification and prevention of misrepresented information
3.1 To reliably carry out creditworthiness assessments, the creditor should design loan documentation in a way that helps to identify and to prevent misrepresentation of information by the consumer, the creditor, or a credit intermediary.

Yes we agree

4. Assessment of the consumer’s ability to meet his/her obligations under the credit agreement

4.1 The creditor should assess the consumer‘s ability to meet his/her obligations under the credit agreement without causing the consumer undue hardship and over-indebtedness, while taking into account data protection rules that may apply in the relevant jurisdiction.
4.2 The creditor should establish sound processes to assess the consumer’s ability to meet obligations under the credit agreement; review these processes at regular intervals; and maintain up-to-date records of those procedures.
4.3 The creditor should take into account relevant factors that could influence the ability of the consumer to meet obligations under the credit agreement without inducing undue hardship and over-indebtedness. The factors may include other servicing obligations, their interest rates, and the outstanding principal on such debt; evidence of delinquency; as well as directly relevant taxes and insurance.
4.4 If the loan term extends past normal retirement age, the creditor should take appropriate account of the adequacy of the consumer’s likely income and ability to continue to meet obligations under the credit agreement in retirement.
4.5 The creditor should ensure that the consumer’s ability to meet obligations under the credit agreement is not based on the expected significant increase of the consumer’s income unless the documentation provides sufficient evidence.

Yes we agree



5. Allowance for the consumer’s committed and other non-discretionary expenditures

5.1 When assessing the consumer’s ability to meet obligations under the credit agreement, the creditor should make reasonable allowances for committed and other non-discretionary expenditures, such as the consumer‘s actual obligations, including appropriate substantiation and consideration of the living expenses of the consumer.


Yes we agree


6. Allowance for potential future negative scenarios
6.1 When assessing the consumer’s ability to meet obligations under the credit agreement, the creditor should make prudent allowances for potential negative scenarios in the future, including for example, a reduced income in retirement; an increase in benchmark interest rates in the case of variable rate mortgages; negative amortisation; balloon payments, or deferred payments of principal or interest.


Yes we agree


7. Identification of groups of loans with higher risk profiles
7.1 The creditor should identify groups of loans with a higher risk profile, and should take this into account when assessing consumers’ creditworthiness.


Yes we agree


Title III- Final provisions and implementation
Competent authorities should implement these Guidelines by incorporating them in their supervisory processes and procedures by 21 March 2016.
No
ANACOFI /ANACOFI IOBSP