Guidelines on arrears and foreclosure

The Mortgage Credit Directive (MCD) provides in Article 28 that Member States shall adopt measures to encourage creditors to exercise reasonable forbearance with consumers in arrears before they initiate foreclosure proceedings . These Guidelines support the national implementation by Member States of the forthcoming MCD. They will ensure that consumers are protected consistently across the European Union when interacting with creditors. The Guidelines establish requirements for verifying consumers’ income, documenting and retaining information, identifying and preventing misrepresented information, assessing consumers’ ability to meet their obligations under the credit agreement, considering allowances for consumers’ committed and other non-discretionary expenditures, as well as allowances for potential future negative scenarios. The Guidelines apply from 21 March 2016, the transposition date of the MCD.