EN    EN EN 
 
EN    EN  EUROPEAN COMMISSION 
Brussels, 31.3.2011 
SEC(2011) 357 final 
  
COMMISSION STAFF WORKING PAPER 
National measures and practices to avoid foreclosure procedures 
for residential mortgage loans 
  
Accompanying document to the 
  
Proposal for a 
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
on credit agreements relating to residential property 
(Text with EEA relevance) 
SEC(2011) 355 final 
SEC(2011) 356 final 
COM(2011) 142 final 
 
EN 2   EN COMMISSION STAFF WORKING PAPER 
National measures and practices to avoid foreclosure procedures 
for residential mortgage loans 
  
Accompanying document to the 
  
Proposal for a 
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
on credit agreements relating to residential property 
(Text with EEA relevance)  
 
EN 3   EN 1. INTRODUCTION  
Defaults on mortgage payments can have seve re consequences for individual homeowners, 
who could lose their homes in a foreclosure pr ocedure, but also for society as a whole, 
through their impact on financ ial and social stability. 
The Commission announced in its Communi cation for the 2009 Spring European Council1 
that it would examine ways to ensure that foreclosures are avoided wherever possible and 
identify national practices in this area. 
Over the last two years, the Commission serv ices have collected information on measures 
already taken or about to be ta ken at national level as well as  information on the evolution of 
defaults and foreclosures. The results are outlined  in this report, the purpose of which is to 
provide examples and guidance for national p ublic authorities and creditors on how rising 
default rates have been addressed across the EU2 with measures to avoid foreclosure 
procedures. The report does not cover initiativ es aimed at creating or reviewing rules on 
individual insolvency. The Co mmission is, in parallel, comi ng forward with a proposal for 
a Directive that aims to promote responsible lending and borrowing and ensure that borrowers 
are offered affordable loans, thus reducing the ne ed for recourse to foreclosure of properties. 
2. EVOLUTION OF DEFAULT RATES AND FORECLOSURE PROCEDURES  
While the data3 needs to be analysed very carefully, several broad trends can be identified. 
All Member States that provided informati on regarding the years 2008 and 2009 experienced 
an increase in default rates over that period. However, when looking at the various default 
rates more closely, Member States appear to  have experienced the impact of the crisis 
differently, with some having higher ab solute default rates than others. 
As is the case with default rates, data relating to the number of forecl osure procedures reveals 
a mixed picture. However, the increase in th e number of foreclosur es opened in 2008–2009 is 
generally significantly lower than over the period 2007–2008, during which Member States 
experienced overall an increase in th e opening of foreclosure procedures. 
                                                 
1 COM(2009) 114, Volume 2. 
2 National examples were provided to the Commission services by Member Stat es between April 2009 
and September 2010. The information contained in this document is only intended to give a picture of 
the existing national measures at a particular moment in time and does not purport to assess their effectiveness or sustainability. 
3 See detailed data in the annex. The situations and fi gures mentioned in this report could change in the 
future with the economic and financial situation. 
 
EN 4   EN 3. NATIONAL MEASURES AND PRACTICE S UNDERTAKEN BY CREDITORS  
Creditors in some Member States  have voluntarily adopted certai n internal practices to avoid 
foreclosures. Certain measures have also been  imposed on creditors in some Member States. 
3.1. Reconciliation procedures 
Reconciliation procedures with the borrower befo re foreclosure procedures can be started are 
aimed at promoting individual so lutions to overcome payment di fficulties. Some examples are 
provided below. 
In Belgium, the law4 requires that a conciliation attempt ha s to be made before a judge before 
the foreclosure procedure can be started. In 2009, creditors committed to immediately 
contacting any borrower who has missed a paym ent in order to find appropriate solutions5. 
In the Netherlands, the Code of Conduct on Mortgage Credit (CCMC) states that if 
a consumer fails to meet his commitments, the lender must enter into consultations with the 
consumer and examine whether a reasonable,  acceptable solution for both can be found. 
In the UK, according to the Mortgages and Home Finance: C onduct of Business sourcebook 
(MCOB) , creditors are required to have  a written policy and procedur es for dealing fairly with 
customers in arrears. The pre-action protocol  for residential mortgage possession cases 
introduced in 2008 states that courts expect the parties to have taken all reasonable steps to 
discuss proposals for repayments of the arr ears prior to the start of a possession claim. 
Under the Irish Code of Conduct on Mortgage Arrears (CCMA)6, the borrower enters the 
lender's Mortgage Arrears Reso lution Process (MARP) when arrears remain outstanding 
31 days from date on which the arrears arose: th e lender must explore a number of alternative 
repayment options to determine which are ap propriate to the borrower's circumstances. 
In Hungary, the Code of C onduct on the Principles of  Fair Conduct by Financial 
Organisations Engaged in Reta il Lending (CCPF) entered into  force on 1 January 2010 and 
states that the signatory institutions would contact the borrower in the event of payment 
default and try to agree on a reasonable solution. 
                                                 
4 Loi relative au crédit hypothécaire . 
5 Principes pour contracter et accorder des crédits hypothécaires et à la consommation de manière 
responsable , Union Professionnelle du Crédit, July 2009. 
6 Revised version of the Code of 6 December 2010. 
 
EN 5   EN 3.2. Mediation 
Mediators often provide a neutral, non-confr ontational setting in which creditors and 
borrowers can negotiate. Mediator s also help the parties to unde rstand and analyse the facts 
and issues as well as to identify cost-effective solutions. Examples of specialised mediation mechanisms are provided below. 
The UK MCOB requires the parties to liaise with  a third-party source of advice regarding the 
shortfall of the borrower and makes arrangements for this. 
Under French legislation7, while it is not obligatory to involve mediators, every bank is 
required to appoint a mediator w ho can be called on by both parties. 
In accordance with the Irish CCMA, at the borro wer’s request and with the borrower’s written 
consent, the lender must liaise with a third pa rty nominated by the borrower to act on his/her 
behalf in relation to hi s/her arrears situation. 
In Cyprus, pursuant to the Cooperative Societie s Law (CSL), cooperative credit institutions 
(CCIs) may refer the repayment of loans in arrears to an arbitration process. 
3.3. Modification of loan terms 
The modification of loan terms before foreclosure procedures can be launched8 is meant to 
help in bridging temporary econom ic difficulties. For this, an assessment of the borrower’s 
long-term ability to repay the loan has to be  made. Several possibili ties exist for modifying 
the terms of the loan or modifying the way it is executed, as described below. 
In France, the courts may suspend a borrowe r’s payment obligations  at his request, for 
a maximum period of two years. Such a decision  must take into account  the creditor’s needs 
and the borrower’s personal circumstances, in particular in cases of dismissal9. 
In Cyprus, under the CSL, the Committee of CC Is may extend the loan repayment period for 
members with arrears if there are reasonable arguments for doing so. 
Under the Irish CCMA, alternative repayment op tions that the lender must explore with the 
borrower when considering a MARP case must include: an "interest only" arrangement for 
a specified period, an arrangement to pay interest  and part of the nominal capital element for 
a specified period, deferring payment of the in stalment repayment for a period, extending the 
term of the mortgage, changing the type of mo rtgage, capitalising the ar rears and interest and 
any voluntary scheme to which the lender has signed up. 
The UK MCOB provides a non-exhaus tive list of the type of op tions that the lender must 
consider, given the individual ci rcumstances of the borrower, e.g. extending the term of the 
loan, changing the loan type, deferring paymen t of interest. Also, a lender must consider 
a reasonable request from a borrower to change the date of regular repayments or the method 
of payment. 
                                                 
7 Code monétaire et financier . 
8 Modifications of the terms of the loan can be also ordered during the foreclosure procedure by the court. 
9 Code de la consommation  and Code civil . 
 
EN 6   EN In Belgium, the borrower can ask the judge to allow him to pay lower instalments over 
a longer period of time. 
In Romania, the Guidelines for Extra-Judicial  Restructuring of Mortgage Loans encourages 
the parties involved to discuss so lutions prior to any measures for mortgage enforcement, e.g. 
modifying the amount of instalments, delaying pa yment, reducing the interest rate for a given 
period of time, changing the type of interest ra te, capitalisation of interest or arrears, or 
refinancing the loan. 
In accordance with the Latvian Consumer Right s Protection Law, the lender must examine 
a request by the borrower regarding extension of the loan or change of the currency of the 
loan, unless the borrower has been in default for more than 60 days or more than three times 
a year for more than 30 days each time. 
The Finnish Consumer Protecti on Act gives examples of modi fications that the lender may 
envisage, e.g. consolidati on of different loans, a moratorium or changes in th e reference rate 
in order to bring down the borrowing rate. 
Under the Hungarian CCPF, signatory creditors  undertake to allow the lump-sum redemption 
of foreign currency loans, in addition to the pos sibility of converting th em into local currency 
at the customer’s request. 
By signing the 'Piano famiglie', members of  the Italian Banking A ssociation commit to 
considering suspensions of mortgage instalme nts for families in difficulty under certain 
circumstances10. 
3.4. Minimum length of time before starting foreclosure procedures 
A minimum waiting period before st arting the foreclosure procedure11 gives time for the 
implementation of any of the practices descri bed above. The additional period provided to 
borrowers may also help them to settle outs tanding payments or come  up with alternative 
payment measures. 
The Italian Banking Code provides that the borrower’s payment has to have been delayed at 
least seven times and for between one and six m onths before a foreclosure can be launched. 
In the Netherlands, the CCMC provi des that a foreclosure cannot start before the consultation 
with the borrower has taken plac e and not within two months af ter the borrower has failed to 
meet his commitment. 
The Irish CCMA provides that the lender must wait for 12 months from the date the borrower 
is classified as a MARP case12, before applying to the courts  to commence legal action for 
repossession of a borrower’s primary residence. 
                                                 
10 The criteria for benefiting from this plan refer to pa rticular events such as job loss, death or disability, 
and to mortgages up to EUR 150 000, granted to borrowers with income up to EUR 40 000. 
11 Waiting periods normally also apply during the foreclosure process. 
12 The 12-month period commences on day 31 but does not include certain time periods, e.g. the period 
during which the borrower is complying with the terms of an alternative repayment agreement. 
 
EN 7   EN In Finland, a mandatory two-month minimum wait ing period applies before a lender can sell 
the shares in Finnish re sidential housing companies13. 
In the UK, the MCOB requires creditors to give  a reasonable period of time to consider any 
proposals for dealing with the payment difficul ties. Further, the UK gove rnment has voluntary 
agreements with the major lenders, who have committed to not initiating proceedings within 
at least three months of an  account going into arrears.  
4. NATIONAL MEASURES AND PRACTICES BY PUBLIC AUTHORITIES  
4.1. Public rescue schemes 
Public rescue schemes have been introduced by several Member States. Such efforts should 
also be seen in the context of the level of soci al security provision in different Member States. 
Furthermore, to the extent that these public re scue schemes confer a competitive advantage on 
the creditors that may distort competition and affect tr ade between Member States, e.g. by 
reducing creditors’ provision for non-performing lo ans, these schemes must be in compliance 
with state aid rules. 
4.1.1.  Public loan guarantees 
A deferral of at least part of the monthly payments to a point in time when the impact of the 
financial crisis has ceased is meant to help borrowers to overcome temporary financial 
difficulties. Public guarantees may provide an additional incentive for creditors to consider 
the deferral of payments. 
Under Spanish legislation14, unemployed borrowers who had not been late with their 
payments were able defer up to 50 % or EUR 500 of their monthly instalments between 
1 January 2009 and 31 December 2010. The state-guaranteed deferred payments had to be 
repaid over the remaining loan duration from 1 January 2011. 
The UK Homeowner Mortgage Support (HMS ) programme, launched in April 2009, provides 
that borrowers with a temporary loss of income  can defer interest payments for a period of up 
to two years, where this is appropriate to thei r individual circumstances and subject to suitable 
independent debt advice. The government can pr ovide a guarantee to creditors covering 80 % 
of the interest payments deferred if the consum er ultimately defaults on the mortgage within 
four years. 
4.1.2.  Possibility to sell the home to a publicly sponsored association or to other funds 
Borrowers may overcome temporary difficulties by selling their property wholly or partly to 
a special entity and buying it back later when their income is high enough to support the full monthly payments. 
The UK Mortgage Rescue Scheme, a government  scheme launched in January 2009, offers 
two options to eligible homeow ners. First, for householders who have experienced payment 
shocks, a registered social landlord (RSL) w ill buy an equity stake in their property, thereby 
                                                 
13 These shares qualify as a mortgage  security on residential property. 
14 RD 1975/2008 of 28 November 2008. 
 
EN 8   EN reducing the homeowner’s repayments to a mana geable level. Second, for the most vulnerable 
households on low incomes with little chance of  sustaining the mortgage, the RSL will buy 
their property in full and rent it back to the former homeowner at  lower than the market rent. 
In Portugal15, borrowers can sell their mortgaged pr operties to a particular fund while 
retaining the right to remain in the home as tena nts, usually for five ye ars, with an option to 
buy back at any time. 
4.1.3.  Financial relief for unemployed homeowners 
Public financial help to homeowners who experi ence an income cut due to the impact of the 
crisis on employment may help to avoid the worst ne gative impacts of a temporary fall in 
income16. Several examples are described below. 
Legislation introduced in Ma rch 2009 in Portugal provides for financial assistance to 
unemployed borrowers. A special credit line allows monthly paym ents to be reduced by up to 
50 % or a maximum of EUR 500 for up to 24 m onths. Reimbursement has to take place in 
monthly instalments at six-month Libor -50 basis points over the remaining loan period. 
Legislation introduced in October 2009 in Po land allows jobless homeowners to apply for 
monthly interest-free public s upport for their mortgage instal ments of up to PLN 1 200, paid 
over one year. Repayment will have to be made over an eight-year period. 
In Ireland, the government Mortgage Interest Supplement scheme17 provides for weekly or 
monthly payment of mortgage in terest on a short-term basis a nd for a property which is the 
sole residence of a borrower. 
In Hungary18, homeowners who lost their jobs thr ough no fault of their own can apply for 
more favourable monthly payment obligations. A state-guaranteed bridgi ng loan for a period 
of up to two years covers the difference between the original instalment due and the more 
favourable instalment. 
In the UK, Support for Mortgage Interest (SM I), an income-based government scheme, helps 
the out-of-work with their mortgage interest. SMI is time-limited to two years for the jobless 
and a 39-week waiting period is  applied. The amount paid is based on the mortgage loan 
outstanding (with a cap of GBP 100 000, te mporarily raised to GBP 200 000 since 
January 2009) and a stan dard interest rate. 
In Italy, the 2009 Finance Act established an a uxiliary fund for borrowers who cannot pay the 
mortgage instalments for their primary residence. 
                                                 
15 Portaria No 1553-A/2008  of 31 December 2008. 
16 This does not call into question the role of priv ate-sector payment or income protection insurances 
which are sold alongside a mortgage in some Member States. 
17 This public financial help to homeowners who lose their job or are subject to temporary income cuts 
was in place in Ireland before the recent crisis. 
18 Act IV of 2009 on Absolute Government Guarantees for Housing Loans. 
 
EN 9   EN 4.1.4.  Temporary tax relief 
While tax incentives for regular mortgage pa yments can be a means of encouraging home 
ownership19, temporary tax relief lightens the financia l burden on borrowers in a crisis period 
and may help homeowners to hold on to their prope rties. Different forms of such tax relief are 
described below. 
The Spanish government approved an EUR 400 tax deduction in order to relieve homeowners 
paying mortgages20. In addition, a voluntary agreement between the government, the banking 
industry, the public registry a nd public notaries faci litated extensions of the duration of 
mortgage loans by exempting borro wers from fiscal, public notary and public registry charges 
caused by an extension. 
In Cyprus, new provisions21 were adopted to reduce the extra registration fees to be paid by 
the mortgagee in case of re-registration of the first mortgage (remortgaging), as a means to 
support borrowers moving to new cr editors offering better terms. 
4.2. Providing debt and legal advice 
Borrowers in difficulty may turn to free or low- cost independent primary debt or legal advice 
before foreclosure procedures have started to  find out about the available options likely to 
solve their problems and eventually reach an ag reement with the creditor. Different services 
can be responsible for providing th is advice, as described below. 
In Estonia, the Financial Supervisory Authority  provides independent a nd neutral advice in 
any disagreements between creditors and borro wers. Debt counselling for individuals in 
economic difficulty is also provided by local government social workers22. 
In Ireland, the national Free Le gal Advice Centre offers basic,  free legal services to the 
public, including advice on cred it and debt issues. The Mone y Advice and Budgeting Service 
(MABS), a national, free, confidential and independe nt service, offers advice to people in debt 
or in danger of getting into debt. In 2009 it ag reed an operational prot ocol with the Irish 
Banking Federation, which enables creditors a nd MABS advisers to work together to 
formulate wherever possible a mutually accepta ble, affordable and sustainable repayment 
plan. 
In Finland, the Money and Debt Adviser, a free municipal service supervised by the 
Consumer Agency, helps over-indebted people with debt settlements. 
In Sweden, the Social Service Act and Debt Re lief Act require every municipality to support 
individuals in need and advise debtor s in matters concerning their debts. 
In the UK, creditors that operate forbear ance under the HMS scheme commit to refer 
borrowers to money advice agencies before deciding whether to enter the scheme. The 
                                                 
19 See, for instance, the Czech Republic, Es tonia, France, Ireland and the Netherlands. 
20 RD 2/2008 of 21 April 2008. 
21 Law No 84(I)/2009 of 17 July 2009. 
22 In April 2009, an advisory manual for these social workers was blueprinted by the Ministry of Social 
Affairs together with the FSA. 
 
EN 10   EN Mortgage Rescue Scheme also requires that households have received independent money 
advice. 
The Danish government has financially supporte d the creation of debt advice centres for 
socially vulnerable people in debt for the period 2009–2012. Debtor advi ce centres exist also 
in Germany and Austria. 
In Luxembourg, borrowers can contact specialis ed services for medi ation and indebtedness 
handling in order to negotiate a reim bursement plan with the creditor. 
In the Czech Republic, several financ ially-supported NGOs provide advice. 
4.3. Encouraging internal reporting 
Internal management reporting can help creditors to detect negative trends in their mortgage 
loan portfolio at an early stag e and analyse the possible reasons. 
Under Article 71 of the Financial Business Act an d the Guidelines issued on the basis thereof, 
the Danish Financial Supervisory Authority requi res that creditors internally report credit 
default rates and respond adequately to this information. 
In Ireland, the CCMA prescribes that the lender must have in place management information 
systems to capture information on its handlin g of arrears, pre-arrears and MARP cases, 
including all alternative repayment arrange ments put in place to assist borrowers. 
4.4. Collecting statistics 
Not all Member States appear to have reliable statistics on default rates or on the number of 
foreclosures. The systematic collection of such data facilitates the identification of negative trends on national markets, enabling appr opriate responses at an early stage. 
In Denmark, mortgage credit in stitutions are required by law23 to report default rates to the 
Financial Supervisory Author ity on a quarterly basis. Fo reclosure procedures are 
automatically reported to the Danish Statistic al Office, which publishes the figures each 
quarter. 
In Belgium, mortgage creditors are required to  report payment arrears to the National Bank of 
Belgium’s Central Individual Credit Register24. 
In the UK, mortgage firms (both creditors a nd intermediaries) are required to regularly 
provide data to the Financial Services Auth ority. The collated info rmation, covering both 
individual transactions and levels of  arrears, is then published by the FSA. 
                                                 
23 Act on Mortgage Credit Loans and Mortgage Credit Institutions and Executive Orders of the Danish 
Financial Supervisory Authority. 
24 Loi relative à la Centrale des Crédits aux Particuliers  of 10 August 2001. 
 
EN 11   EN 5. LESSONS TO BE DRAWN  
The Commission services consider  it essential that Member Stat es continue to monitor the 
economic situation closely and consider, if ap propriate, introducing rules aimed either at 
preventing foreclosures or, where such procedur es are launched, at limiting their social and 
economic impact. Creditors can also play a cruc ial role by adapting thei r current practices to 
deal with defaulting borrowers. Indeed, they often ha ve an interest in  avoiding expensive 
foreclosure procedures, the proceeds of which ar e almost always lower than from an unforced 
sale. 
Public authorities and creditors may find this re port a source of inspir ation. Its purpose is not 
to draw up a ‘league table’ of the best national pract ices. These practices should be considered 
within their respective na tional contexts and, in many cases, it is still too early  to measure to 
what extent they have been adequately flexible  and responsive to the r ecent economic crisis as 
well as to assess their effectiveness. 
Nevertheless, some positive trends and common pr inciples can be identified. In particular, 
foreclosures should constitute a m easure of last resort for a le nder. As highlighted, there are 
several steps and initia tives that can be attempted before  repossession. Where it is clear that 
a given borrower is entering into difficulties,  a dialogue should take place with the lender 
either bilaterally or through a me diator. The purpose of the dial ogue is to explore alternative 
repayment measures, i.e. a renegotiation of the loan terms and/or duration. If such a dialogue cannot take place, or if it fails, it may be us eful to promote the provision of independent, 
confidential and, if possible, fr ee debt advice for borrowers. 
This report has focused on pre-foreclosure proc edures. However, where foreclosures do take 
place, which cannot be completely ruled out,  common sense and humanity should always 
prevail at all levels (lender, authorities, courts, et c.) and throughout the w hole procedure. In 
particular, the full economic and social situation of  the defaulting borro wer should be taken 
into account, and the implicat ions of a given repossession should be carefully assessed, 
notably when a primary residence is at stake. For example, losing the family home after having lost one’s job has intolerable social and human implications for both borrowers and 
their families. In these critical economic time s our society must put the human dimension at 
its very heart. 
6. F
OLLOW -UP 
The Commission services will closely monito r the development of default rates and 
foreclosures as well as the measures taken by Member States to prevent foreclosures. 
 
EN 12   EN Annex 
 
Evolution of default rates and num ber of foreclosure procedures 2007–2009 
1. INTRODUCTION  
Both questionnaires sent in April 2009 and July  2010 asked Member States to provide data on 
default rates and on the number of foreclosur e procedures at national level. Several 
Member States did not have data on residential mortgage loans alone or statistics on an annual 
basis and several Member States were unable to pr ovide any data at all. As a result, the data 
provided in this Annex indicates broad trends , but should not in any way be considered 
comparable. This data should theref ore be assessed with great care. 
2. DEFAULT RATES  
While the data needs to be analysed very carefully25, several broad trends can be identified. 
All Member States that provided data or information regarding years 2008 and 2009 
experienced an increase in default rates be tween 2008 and 2009. Member States experiencing 
an increase in default rates faced varying degr ees of severity. The increases should be looked 
at carefully when drawing conclu sions as to the extent of the problem. For instance, between 
end-2007 and end-2009 while default rates in Portugal and the UK rose only slightly, default 
rates in Cyprus, Hungary and Poland more th an doubled and in Ireland tripled. Default rates 
in Denmark, Spain, Estonia, Bulgaria and Latvia all increased more than threefold. 
However, Member States have different levels of default rates. The observed increases should 
therefore be looked at carefully when drawing conclusions as to the extent of the problem. 
Apart from Bulgaria, Cyprus, Estonia, Greece,  Hungary, Ireland, Latvia and Poland, in none 
of the Member States and Norway do loans over th ree months in arrears appear to account for 
more than 3 % of total outsta nding mortgage loans in 2009. However, such low country-wide 
figures should not detract from the social and economic impact and importance of arrears for 
the individual borrowers concerned. Member Stat es therefore appear to have experienced the 
impact of the crisis very differently. This  is supported by the fact that three of the 
Member States with the highest increases (Denmark, Estonia and Latvia) exhibit very 
different default rates. Clearly, those relative in creases must be viewed alongside the absolute 
default rate, which is low in some of these cases. 
Table 1 below includes detailed data on default rates in Member States since 2007. For the 
purpose of this exercise, default rates refer to the percentage of mortgage loans over 90 days 
in arrears in relation to outstanding mortgage loans in a Member State, unless otherwise 
indicated. Data relates to the total number of contracts in default to the total number of 
outstanding contracts, un less otherwise indicated. 
                                                 
25 For instance, Finnish data have been calculated usin g available statistics on the number of judgments on 
payment demands (which relate to bank loans in general, not only loans granted for residential 
purposes) and the number of Finns having a mortgage loan. UK figures relate to loan accounts, which 
are slightly higher than figures for individual borrowers. 
 
EN 13   EN Table 1:  Evolution of default rates 
Member States 
(in protocol order)  Default rate1) 
31.12.2007 (%) Default rate1) 
31.12.2008 (%) Default rate1) 
31.12.2009 (%) Increase? 
Belgium 1.72 1.65 1.69 Yes11) in 2008/2009 
No11) in 2007/2008 
Bulgaria 1.32 0.53 7.836) Yes 
Czech Republic 1.5 1.6 2.5 Yes 
Denmark 0.12 0.26 0.55 Yes 
Estonia 0.4 1.5 4.0 Yes 
Ireland 1.212) 1.443) 3.6 Yes 
Greece 3.6 5.3 6.48) Yes 
Spain 0.72 2.38 2.88 Yes 
France 0.44 0.40 0.44 Yes13) in 2008/2009 
No in 2007/2008 
Italy 1.0* 1.4* – Yes 
Cyprus 3.24 3.90 6.90 Yes 
Latvia 0.71 4.73 15.959) Yes 
Lithuania – 0.873) 2.777) Yes 
Hungary 2.9 3.47 7.65 Yes14) 
Malta – 0.53–0.84 2.610) Yes 
Norway 0.50 0.7 – Yes in 2007/2008 
N/A in 2008/2009 
Poland 1.2 1.0 3.2 Yes  
Portugal 1.3* 1.34) (1.5*) 1.6011) 
(1.7* July 2009) Yes 
Romania – 0.035) 1.6711) Yes 
Slovakia 2.17 2.27 – Yes in 2007/2008 
N/A in 2008/2009 
Finland 0.12 0.17 1.27) Yes12) 
United Kingdom 1.88 2.42 2.45 Yes 
Source: Member States (in protocol order) as of September 2010. 
* Data provided by industry as of January 2010. 
1) Default rates relate to the volume of outstanding residential mortgage loans in default to the total volume of 
outstanding mortgage loans in Cyprus, Denmark (mortgag es issued by specialised mortgage credit institutions) 
and Estonia. 2) 31.12.2006. 
3) 30.6.2008/1.7.2008. 
4) February 2008. 5) April 2008. 
6) 30.6.2010. 
7) 30.3.2009/1.7.2009. 8) 31.3.2009. 
9) 30.9.2009. 
10) March 2009. 11) Data calculated using statistics provided in the annual report of the National Bank of Belgium for 2009 — 
cf. Statistiques, Centrale des credits aux particuliers , February 2010. 
12) Data calculated using statistics on number of judgments on payment demands. 13) Data refers to the volume of default instalments over 12 months to the volume of outstanding household 
loans at the end of those 12 months. 
14) Data includes both consumer and mortgage loans. 
 
EN 14   EN 3. NUMBER OF FORECLOSURE PROCEDURES  
Eighteen Member States provided figures or qualitative information on the evolution of the 
number of foreclosure procedures  in recent years. As  with default rates,  the data should be 
analysed with care26 and reveals a mixed picture. While  five Member States have not 
experienced a noticeable increase or have even  experienced a decrease in the number of 
foreclosure procedures, most of the Member St ates that provided information have seen an 
increase in the opening of foreclosure pr ocedures over the period 2007–2008. The rate of 
increase in the number of foreclosures  opened in 2008–2009 is, however, generally 
significantly lower than the 2007–2008 figures. 
Again, the rising numbers need to be interprete d with caution. First, while, for instance, an 
increase of more than 63 % in Finland seems high, the total number of foreclosure procedures 
is still below 1 000 (and includes more than residential mortgage loans). At least some 
Member States, such as Latvia, have therefor e started their increase from a very low base. 
Second, the total volume of foreclosure procedur es and their increase should be looked at in 
relation to the total number of outstanding residential mortgage loans. This would provide an 
idea of the extent of the probl em in a market. For instance, while the sheer number of 46 825 
foreclosures in 2008 in the United Kingdom seems to be very high, compared to the total 
number of outstanding mortgages the number of foreclosures is still relatively low (0.30 %)27. 
Table 2 below provides information on the number of foreclosure procedures in 
Member States since 2007. 
                                                 
26 For instance, Finnish data reflecting the number of forced sales also include loans other than residential 
mortgages and loans to legal persons. Slovak data reflect all foreclosures, of which residential mortgage loans account for approximately 90 %. Spanish data apply to all mortgages, not only for housing. 
27 Data were provided by the UK Financial Services Authority in reply to the Commission’s 
questionnaire. 
 
EN 15   EN Table 2:  Evolution of the number of foreclosure procedures1) 
Member States 
(in protocol order)  Number of 
foreclosures 
in 2007 Number of 
foreclosures 
in 2008 Number of 
foreclosures 
in 2009 % 
change 
2007–
2008 % 
change 
2008–
2009 Increase? 
Bulgaria 449 
(452)) 886 
(982)) 1 5703) 
(672)3)) 97.33 77.20 Yes 
Denmark 1 015 1 942 2 860 91.33 47.27 Yes 
Germany 91 788 88 379 86 617 -3.71 -1.99 No 
Estonia – 843 
(7662)) 1 329 
(8692)) N/A N/A N/A 
Ireland – – 7144) N/A N/A N/A 
Spain 25 943 
(17 4022)) 58 686 
(20 5492)) 93 319 
(37 6772)) 126.21 59.01 Yes8) 
France – – 9 422 N/A N/A Not aware of any 
noticeable increase in 
foreclosure procedures6) 
Cyprus 596 
(272)) 636 
(142)) 358 
(242)) 6.71 -43.71 Yes in 2007/2008 
No in 2008/2009 
Latvia – 5582) 1 7022) N/A 205.02 Yes in 2008/2009 
Hungary 225 663 
(2 5572)) 245 597 
(2 5882)) 71 683 
(6632)) 8.83 -70.81 Yes in 2007/2008 
No in 2008/2009 
Malta – – – N/A N/A Not aware of any 
noticeable increase in 
foreclosure procedures6) 
Netherlands 1 811 1 961 2 256 8.28 15.04 Yes 
Austria 7 908 8 186 7 920 3.52 N/A Yes in 2007/2008 
No in 2008/2009 
Poland 1 841 1 618 – -12.11  No in 2007/2008 
Slovakia 1 070 1 865 – 74.30  Yes7) in 2007/2008 
Finland 506 825 1 036 63.04 25.58 Yes 5) 
Sweden 1 904 3 157 3 499 65.81 10.83 Yes 
United Kingdom 27 8692) 46 9842) 
(0.30 % of all 
mortgages) 54 0142) 
(0.35 % of all 
mortgages) 68.59 14.96 Yes 
Source: Member States as of September 2010. 
1) Data refers to opening of foreclosure procedures, which does not necessarily correspond to the number of 
concluded foreclosure procedures in a given year, unless otherwise indicated. 
2) Data refers to forced sales. In Spain this figure re fers to concluded foreclosure procedures, i.e. procedures 
resolved by the judge, whether in favour of the lender or not. In Estonia, the figures refer to terminated 
procedures. In Latvia, the figures refer to the process comp leted in court with a decisi on on the transfer of the 
property after a forced auction. In Hungary, the figure refers to the number of properties sold.  
3) 30.6.2009.  
4) Number of court applications to  commence proceedings to enforce de bt/security in Q3 and Q4 2009.  
5) Data also includes loans other than residential mortgages and loans to legal persons.  
6) Qualitative information provided in 2009.  
7) Data reflects all foreclosures, of which resi dential mortgage loans account for approximately 90  %.  
8) Data applies to all mortgages, not only for housing.