Moscow instead of munich – banks continue to sell mortgages

In Germany, mortgages are often traded between banks. There are several reasons for this, but in recent years a new trend has emerged: several German banks have begun selling their mortgages to Russian banks.

These sales are part of a global trend in which banks around the world are reselling mortgages and other loan contracts to investors. In the U.S., such sales have been commonplace for decades and are an important part of the financial marketplace.

But in Germany, the trend is relatively new and has already sparked controversy. Critics claim that selling German mortgages to Russian banks poses a risk to the stability of the German banking system. Others argue that the market for mortgages can only benefit from a variety of investors.

Why do banks continue to sell mortgages?

There are many reasons for selling mortgages. Often banks need liquidity to make other loans or to repair their balance sheet. By selling mortgages, they can raise money quickly without having to make new loans or increase their capital.

In addition, banks can also reduce risks by selling mortgages to other investors. If a mortgage borrower cannot repay his loan, the bank that sold the loan no longer bears all the risk alone. Instead, several investors share the risk.

More and more banks are selling their mortgages

At a time when interest rates are at historic lows, more and more banks are choosing to resell their mortgages. These are not only small banks or credit institutions, but also large banks such as Deutsche Bank, for example.

One of the reasons for selling mortgages is that banks gain liquidity by doing so. Selling mortgages is a way for banks to get money quickly, for example, to expand into other lines of business.

Another reason is that banks can minimize their risk by selling mortgages. For example, if a bank has a large number of mortgages in its portfolio, it can spread the risk by selling these mortgages, minimizing the likelihood of default.

However, there are also critics who criticize the sale of mortgages. According to them, this may cause borrowers to lose their rights and no longer be able to contact their bank directly. In addition, interest rates and terms for borrowers may be changed after the mortgages are sold.

Moscow instead of munich - banks continue to sell mortgages

How does the sale of mortgages?

Mortgages are a type of loan that people take out to help them afford to buy property. Many banks offer mortgages by extending credit to customers to enable them to purchase their desired property. However, this loan will not stay with the bank forever.

Banks often sell their mortgages to loan asset managers or investors. Banks are bundling mortgages into loans of different sizes, and these loans are then sold to investors as investment products. Selling mortgages allows banks to increase their capital and improve their liquidity.

However, banks still have a responsibility to borrowers and must ensure that when they sell the mortgage, they minimize the risk to the borrower and the new buyer. Contracts are typically established to ensure that the new mortgage buyer receives the same terms as the original borrower.

The sale of mortgages can be beneficial for investors, as it offers a way to invest in real estate without investing directly in property. There is no need for the borrower to worry as he has signed his loan agreement with a solid bank and the terms remain the same for him even if the bank sells the mortgage.

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