Help, my loan was sold!
ChroniquesDuVasteMonde: Can All Mortgage Loans Be Sold?
Helma Sick: Yes. According to a study by the Institute for Financial Services in Hamburg on behalf of the consumer centers, the private mortgage lending in Germany amounts to almost 800 billion euros. Since 2003, loans in Germany amounting to 15 billion euros have been sold. These are mostly "non-performing" loans for which the contractually agreed payments have not been made. Banks sell these loans to clean up their balance sheets and reduce risks. But: In order to make a package of non-performing loans more interesting for an investor, more and more often "healthy" loans are mixed in - loans that are serviced according to contract. Federal Court of Justice and Federal Constitutional Court have approved this practice in 2007: A transfer is possible without the consent of the customer, unless otherwise agreed in the contract.
ChroniquesDuVasteMonde: Can problems arise, even if you pay punctually?
Helma Sick: No. Customers are legally well protected in Germany. The buyer of a loan is bound by the original contract with all rights and obligations. Anyone who provides the agreed interest and principal for his loan on an ongoing basis, therefore, has nothing to fear. The buyer of the loan then has no opportunity to terminate the loan early. And if he tries, customers can take immediate legal action.
ChroniquesDuVasteMonde: What happens when you are in financial difficulties?
Helma Sick: Then a loan sale is problematic! Who is in arrears with the payments, must expect the initiation of foreclosure. The bank sells the loans at a hefty discount to the investor, who often pays only 30 to 40% of the receivable. Buyers usually do not intend to continue the loan relationship: for them, it is important to quickly realize the loans with the greatest possible profit. If foreclosure has already been initiated, there is hardly any room for maneuver. Therefore, in the event of payment difficulties, think about selling the property as early as possible in order to avoid foreclosure.
ChroniquesDuVasteMonde: What to pay attention to when interest rate fixation ends?
Helma Sick: Most buyers are not interested in continuing their loans. Often, after the end of the fixed interest period, no offer is offered for follow-on financing or only one on very bad terms. The customers would then have to repay the existing remaining debt completely! It is therefore urgently necessary to negotiate follow-up financing at least six months before the end of the fixed interest period with other providers.
Conclusion:
If you get into financial difficulties, you should talk to the bank immediately or sell the property yourself in order to avoid foreclosure. Those who pay punctually have nothing to fear under the current legal situation. However, it is important to seek timely termination of the fixed interest period for follow-up financing.
