Transfer and transfer of real estate loans: silence of the banks

In a period of rising interest rates and credit tightening, we can regret it buyers of real estate do not have the opportunity to make use of the mechanism portability and/or transfer of property loans.

Portability and transferability: two contractual mechanisms

There transfer of a loan consists in a bank achieving maintenance of the conditions of the original loan by purchasing a new property after the sale of the previous one (after giving rise to the granting of the loan). Few banks provide this contractual mechanism, which of course requires certain conditions to be met: for example, the newly acquired property must be of sufficient value to constitute an acceptable guarantee for the benefit of the lender, particularly where it aims to create -a transfer of real guarantee (mortgage); The borrower must have fulfilled the loan agreement, without any deficiencies or delays in payment.

There the marketability of the loan makes it possible to pay the balance of a loan by the buyer of real estate financed by this loan. It is, in a way, a transfer of debt. Note, however, that the buyer must be able to finance. The bank can reject a substitution of the borrower if the buyer does not provide a sufficient guarantee of solvency.

These are two contractual mechanisms which require agreement from the parties to the loan contract, primarily the banks.

An intervention from the legislature?

Many real estate agentsincluding FNAIM, while we were witnessing a rise in interest rates, suggested that banks should be required to systematically include in future loans a clause that allows the borrower to request the transferability or portability of a loan within the border. of 10 years without changing the interest rate. It is obvious that the banks resisted… The proposal was not followed up on.

In the event that regulatory intervention today would have the effect of forcing banks to offer the two options above, it appears that in the event of rate stabilization the contractual mechanism would be of less interest. Although… Regarding portabilityits implementation may not require an examination of the individual’s borrowing capacity as it involves proceedingexecution of a loan are granted regularly, taking into account the recipient’s borrowing capacity on the subscription day. This could lead to an improvement in the situation for the buyer who has just sold a property. Some banks have agreed to introduce in certain cases one portability clause and this commercial gesture should be welcomed.
This, again, is a simple measure which would make it possible to concretely reduce the cost of credit in its current configuration and which would promote the fluidity of the market with immediate effect. The loan is a contract, and if it appears difficult to impose by law a loan portability currently amortized, the competent authorities could make recommendations to the banks so that borrowers’ requests for portability are met with sympathy.

As far as future loans are concerned, intervention by the legislature can rightly be expected. Furthermore, on a practical level, real estate agentsit is recommended to investigate with the seller at the power of attorney, in the event that the property loan relating to the sold property has not been fully amortized, whether there is a possibility of possible transferability thereof, which can be a significant element in facilitating the sale.

Handle the emergency with simple measures

Faced with a housing crisis unprecedented, namely a simultaneous crisis of the sales offer and the rental offer, should not all non-coercive and rapid measures to be implemented be taken as soon as possible, even if this means that not everyone has to be satisfied?