Is an assignment clause mandatory?

Hello everyone,

we have now received a very attractive offer for an annuity loan through a financial intermediary, in which all relevant criteria are fixed according to our ideas.

The only thing that bothers me greatly is the missing invalidity declaration regarding the assignment agreement. It explicitly states in the offer that claims can be assigned to third parties.

I exclude at 99.9% that an assignment will occur due to payment difficulties on our part (even if that may sound arrogant now). We have a loan-to-value ratio of under 70% and a monthly rate of under 20% of our available Hamburg net income. That is why we were also able to choose the lender. We have 20 years fixed interest at 3.05% and want to pay a lot through the 5% special repayment.

Now my questions:
What reason could a lender have to assign a contractually properly serviced loan?
Can the buyer of the loan call it due immediately and without reason? Why would he do that?

To summarize: I am very satisfied with the contract and, from my point of view, would have security over the monthly burden throughout the entire contract period and beyond that maximum flexibility with special repayments. By the end of the fixed interest period, the loan should be fully paid off, so that any turbulence in the capital markets is completely unimportant to me.
What only scares me is the scenario that suddenly someone shows up during a high interest phase and calls the loan due, and then I slap myself for signing a contract without excluding the assignment clause.

What do you think? How do you basically see this issue?

Thanks in advance and best regards,

der Mops

Hello Rollmops,

I would seek a conversation with your financial advisor and discuss with him the possibility of excluding this clause.
This clause allows the bank to sell the claims to a third party in bad times, when it needs money, without you having to be informed in that case.
As a rule, however, there is a reason why this is agreed upon.

If necessary, I would choose another bank if I had the choice like you, even if it is a few interest points more expensive.

Best regards
André

I believe that
After the change in the law, some positive changes have occurred for the borrower.
If these are not made, such as the duty to inform, etc., you could assert claims for damages.
Since you said that the probability that you won’t be able to repay the loan is almost zero, you really don’t need to worry, otherwise, as already said, just ask whether this clause can be excluded at another bank.

I’ll send you a link where you can read about this in detail.

Best regards
André

As far as I know, almost correct from kld.

It does not necessarily have to be that the installment was not paid for 2 months. It can be enough if you get into arrears with your account balance.
So if you live month to month using your overdraft, the bank can already take that as a reason to sell to third parties, even if you always pay your actual loan on time.

Unfortunately, I am missing the source for that right now, so please ask again.

Thank you very much for the answers.

I will also bother the broker again. I would actually like to sign it now so that the issue is off the table.

Actually, the core question is whether a lender can generally call a loan due that has been serviced according to the contract, and if so, under what conditions? (Are there no lawyers here? Unfortunately, I can only look at the topic from an economic perspective.)
If that were generally the case, all home builders would basically be in the same boat, regardless of the lender. That can't really be.

Another question is, of course, why would the bank do that? Hypothetically, calling the loan due would only be profitable for the bank if it could invest the capital tied up with the borrower elsewhere under better conditions. This would be the case, for example, if the bank could invest "my" euros tied up for 20 years in a few years at a theoretically higher interest rate in (safer) German government bonds with, for example, only a 10-year term. If it came to that, the general interest rate level would also have to be significantly higher than today, so that the home builder would then be forced into a much more expensive follow-up financing. Right?

Hmm. No idea how I came up with such a scenario. But then everyone would have that problem.

So the core question above remains. The answer would then apply to every bank anyway.

I think I’d better go to the office now.

I would be very happy if someone with expertise would still comment.

The Pug

Hello

I want to clear up the rumor that all financial institutions are "keen" to call in loans and realize the collateral. At least in Germany, no institution has an interest in politicians showing up at their door.


This clause allows institutions to pass on loan packages in emergency situations. This has often been seen during the crisis. The borrowers must not suffer any disadvantages in the process. Whether you can find an institution without this clause and at what (additional) conditions would need to be inquired.


Good luck