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Better protection for customers
Risk limitation law protects homeowners
Banks must inform customers before contract will see if their loans may be sold.
Recently, numerous reports on private real estate loans made to foreign financial investors had been sold, homeowners considerably.
Now aims to limit the risk of law the rights of both the borrower and the rights of businesses in dealing with financial investors, to be strengthened.
Banks should inform their customers
In future, banks, their customers even before the contract informed whether their loan can be sold. The customer then has the option of a loan process, in which it is excluded.
This requires a “significantly shaped note” in the credit contract. Missing a notice in contracts drawn up from the entry into force of the new law will be closed, the credit sale is not invalid. The customer may then, however, substitute its resultant damage.
Already, in anticipation of this scheme, some banks started to offer loans to consumers who can not be sold. However, this security comes at a price. So some banks offer their customers today, at an additional cost from 0.1 to 0.2 percentage points per year for credit sales over the life out.
Obligations of banks in credit sales
Banks have their customers will “immediately” from the change of contractor to teach. This, however, are only affected banks, the loan contract completely out of hand. They remain even after the loan sale contact for the debtor, because they take customer service, experiences of borrowers from banks deal nothing.
This model is especially large banks, contending that the collection or the care of departments or subsidiaries outsource.
With mortgage interest rates contracts are usually for five to 20 years. After the expiry of such fixed-rate borrowers and creditors to negotiate new terms. A general right to a follow-on financing is in place and it will not happen in future.
However, the banks their future customers at least three months before expiration of the rate indicate whether the contractual relationship they want to continue. Who gets a rejection, it still has at least three months to get another job to worry about.
Customers whose financial situation is hot, but do this in the future difficult. The period of three months is, therefore, especially for customers with financial difficulties very short.
Termination in case of late payment
If the borrower’s rates lagging behind, a termination of the loan in future more difficult. Until now there has been no mandatory rules on how big the gap in order to terminate the bank and thus to recover the loan to entitle.
A new provision (Section 498 paragraph 3 BGB) should now be laid down that the customer “with at least two installments in whole or in part” to be in default. Furthermore, the residue of at least 2.5 percent of the total nominal value of the loan.
Termination for good reason
In addition to termination for default of payment, the bank nor the right to terminate the loan agreement for good cause to terminate (Section 490 BGB). Such an important reason is when the property is about to lose value and the customer does not provide additional security or the financial situation has deteriorated.
Forced sales are still possible
Banks may – under the existing and future law – the object auction. This is made possible by a paragraph in the mortgage instrument, whereby the customer “immediate execution” subscribes. This threatens all our customers the foreclosure when the mortgage is due. Since most mortgage contracts to regulate ordering that no termination is needed, so this is payable immediately.
When do the new rules?
The new rules outlined in the Risk Limitation Act shall apply when the law comes into force. Since the first law on 4 July the Bundestag and the Bundesrat must happen, is the earliest from the autumn to be expected.
Once it is in the Government Gazette is published, it is important for all real estate loans, the newly completed or sold.