MILAN (Thomson Financial) – Italy’s economy minister Giulio Tremonti said the government wants house owners to be able to freely switch their mortgage providers at no cost.
Presenting the agreement with the Italian banking association for the renegotiation of mortgages, Tremonti said the government will take steps to make sure that there is ‘free switchability’ of mortgages.
Earlier Tuesday Italy’s antitrust authority said house owners should be able to switch mortgage providers without incurring any cost.
MILAN, May 27 (Reuters) – Moody’s will assess potential structural risks for Italian mortgage-backed securitisations posed by an agreement on mortgages between the government and banks, the agency’s general manager for Italy Alex Cataldo said on Tuesday.
Under the terms of the accord, borrowers will be able to ask banks to turn variable-rate mortgages into fixed-rate ones.
Rising interest rates have increased mortgage payments for many low-income Italian families. Cataldo said the agreement had a positive impact because it could help some borrowers stave off a potential default.
"On the other hand, we need to assess the impact on the maturity and the excess spread of each deal," Cataldo said. The excess spread represents the net interest payments from securitised assets after all payables and expenses are covered. According to Fitch Ratings, giving borrowers the right to renegotiate their home loans may hurt residential mortgage-backed securities (RMBS).