“The increasing number of rules prevents more and more people to receive a mortgage. This further locks up the housing markets”. Kwaaitaal observes that politics and supervisors want to further reduce the risks of providing mortgages. “But the arrears on Dutch mortgages are still among the lowest in the world?” […] ING critizes the stricter rules after they received the €130,000 penalty from the AFM[…]
Providing mortgages is more subject to laws and rules than strictly necessary, according to the ING Manager. He points out the stricter rules of budgetting bureau ‘Nibud’ and the increased standards for the ‘National Mortgage Warranty’ (NHG). “And then there is the applicable AFM market standard that limits the provision of jumbo mortgages (mortgages of more than 100% of the execution value of the house)”.
According to Kwaaitaal, the decision of the AFM to penalize ING discloses that the code of behavior for banks concerning mortgages is further restricted. “There is less room for banks to make their own judgment on risks. Every time something is taken away. It’s like being forced to drive 30 miles everywhere, while 55 miles is normally allowed”.
The AFM not only penalized ING for applying criteria that offered too little protection against overcrediting. The bank actually provided too high mortgages to their customers
With 5 of 20 investigated cases the AFM concluded that ING didn’t follow the banking industries’ own code of behavior (GHF). This led directly to mortgages that were too high. Overcrediting varied from 3.2% up to 18.5%.
The bank continued to claim that the 5 cases were advised “meticulously and in the best interest of the customer”.[…]