The credit sale is still allowed, but within narrower limits than before

Backgrounds and legal foundations

Not only movable goods can be bought and sold, but also contractual contracts are available for sale. A credit sale is generally understood when a bank where the customer takes out a loan sells the receivables. So something is called therefore also sales of receivables. This option offers the bank the opportunity to quickly restructure its balance sheets in times of financial hardship and to refinance cheaply and quickly.

Credit sales are allowed and occur more often in the real economy than you think. The debtor does not have to agree, his contract terms remain unchanged – only the creditor is another. The legal basis for this business can be found in the Civil Code.

Sale on late payments and US real estate crisis

Sale on late payments and US real estate crisis


If the borrower defaults on his payments, the bank may sell the mortgage contract and thus have a problematic contract less. In the past, funds often bought these contracts, with the intention of turning the real estate into quick money.

After expiry of the fixed interest period, when a follow-on financing had to be renegotiated, the funds insisted on an immediate repayment of the remaining debt. Since only very few people had the necessary change at hand, the investors resorted to the property and obtained a foreclosure. Thus, the borrower could lose home and farm terribly quickly.

The sale of mortgage bonds to international funds is strongly reminiscent of the economic crisis triggered by the US housing crisis. Banks sold en masse contracts: they bundled both good and bad loan contracts for parcels and sold them to international funds. If the customer repaid the loan, the profit was enormous. Those who did not pay had to stick with their secured house, which was foreclosed.

The system collapsed when initial demands were made that borrowers could not afford: many of the contracts were of inferior quality, meaning people were getting a mortgage they could never fully repay. In addition, as the real estate market eased and house prices fell, the packages drastically lost value.

Introduction of the Risk Limitation Act

Even though the situation in Germany was not as bad as it was in America or other countries, it was unacceptable in the long term. The legislator, therefore, passed the so-called risk limitation law in 2008. This law does not prohibit the sale of credit itself or foreclosure by the buyer, but both have been made more difficult: banks must explicitly refer to the possibility of selling credit in their contract. If the bank decides on the receivables, it must inform its customers.

  • The bank can only sell the contract if it informs the customer of this possibility at the signing of the contract and makes explicit reference to it.
  • The buyer of the loan must inform the customer immediately after the purchase that he is now a creditor.
  • Extraordinary termination by the creditor is only possible if the debtor is in arrears with at least two consecutive payments and, in addition, the outstanding sum amounts to at least 2.5 percent of the total loan amount.
  • Banks are required to submit a follow-up offer no later than three months before the end of the fixed interest period or to inform the borrower that they wish to sell the contract.
  • If the buyer of the contract unjustifiably submits a foreclosure, he makes himself liable for damages.

Validity only for contracts after 2008

The Risk Limitation Act applies only to contracts concluded after 2008. For previously closed it does not apply.

Securing contracts signed before 2008

Securing contracts signed before 2008

Even though the Risk Limitation Act applies only to contracts concluded after 2008, the older contracts are not wholly “defenseless”. The BGH ruled in 2010 (AZ: XI ZR 200/09) that in the event of imminent foreclosure, it must of its own motion be checked whether all rights were also acquired with the contract.

This means that the magistrate, even without having a concrete suspicion, must examine this fact. If he concludes that the law of foreclosure has not been sold, it may not be enforced, even if all other conditions are met.

Termination of loans by the bank

Termination of loans by the bank


The bank, or the buyer of the loan, is not entitled to terminate the contract during the fixed interest period-direct lender payday loans for you. This possibility is prohibited by law. It only has the right to an extraordinary termination if the customer is in default of payment.

In the letter of termination, the bank must set a deadline in which the outstanding debts can be settled. If this deadline has passed without effect, the enforcement can be obtained.

This is how you can protect yourself

If the borrower does not default on payments during the fixed interest period, foreclosure can be prevented. If you pay punctually, you do not have to fear negative consequences. In addition, there are some tips to keep in mind to avoid unwanted loan sales.

Exclude sales of receivables

Exclude sales of receivables


To rule out the risk of selling credit from the outset, you can have your bank sign an agreement in the contract that prohibits it. However, a few banks charge fees for this arrangement; Again, other banks advertise with the exclusion, since you promise you as a borrower by this more security.

Therefore, ask your bank before concluding whether and on what terms a sale of receivables can be excluded. Possible, for example, interest premiums of 0.2 percent.

Make realistic monthly payments


If you always pay on time for your regular installments, the risk of selling a loan is relatively low. Often only bad loans are sold. It is all the more important that you assess your monthly resilience realistically – and do not overestimate monthly payments.

Address payment problems early


Should you, as a customer, experience temporary payment difficulties, it makes sense to contact the bank early and make an agreement. Usually, banks are accommodating because they have an interest in settling the debt.

Check framework conditions

If there has already been a sale of receivables, you can check whether all legal requirements have been met. For contracts from 2008, the Risk Limitation Act sets further conditions for the credit seller. Among other things, as a borrower, you must have been explicitly informed of the possibility of selling the receivable when the contract was signed. In addition, the buyer must inform immediately after the purchase that he is now the new creditor.

US and Canada continued trade talks

During Nafta negotiations Trump disrespectfully comments on Canada

<strong>During Nafta negotiations</strong> Trump disrespectfully comments on Canada

It promised to be a quiet weekend in Washington: the trade agreement with Mexico in dry sheets, the chances of reaching an agreement with Canada well, the economic truce with Europe intact, the words towards China rather friendly. But Donald Trump is one for whom rest seems to be what other people’s scabies are – unbearable. In a single interview, the US President on Friday canceled out the hope of further easing the global trade dispute and instead once again launched on Europeans, Chinese and Canadians.

The Verbalattacke apparently contributed to the fact that the US-Canadian talks on a reform of the Nafta Free Trade Agreement contrary to expectations again had to be interrupted without result. They should be continued next week. What prompted Trump to switch back into attack mode right now was initially left open.

is on average the customs Canada levies on the import of dairy products. This has brought US President Donald Trump on the palm of a deal that a reform of the Nafta Free Trade Agreement to the last at this point hung. What Trump keeps secret: The US also demands high tariffs on individual agricultural products.

An excerpt on Friday from the interview of the President with the news agency Bloomberg , which was actually not intended for publication, but had been leaked to the Canadian newspaper Toronto Star for special excitement. In it, Trump admits that he is not looking for a compromise with the Ottawa government, but simply threatens to impose tariffs on car imports until Canada meets all its demands. However, he could not say this publicly because the Canadians then lose face and have to break off the negotiations. “Let’s just say, Canadians are working their asses off, but whenever we have a problem at one point, I’m just holding up a photo with a Chevrolet Impala,” the president said.

The GM car is manufactured in Canada. It is unclear how the statements of the President came from the interview with the Bloomberg journalists to the Toronto Star . Trump complained on Twitter that was quoted from the background conversation. At the same time he confirmed the content: “At least Canada now knows where I stand,” he wrote.

The issue of tariffs on cars so troublesome for the EU was raised by Trump in the interview with a new source of conflict. The Brussels proposal to simply cancel all car taxes on both sides was “not good enough,” he complained. He seems to swear meanwhile that it is not just different import duties that prevent many Europeans from buying American cars. “Their consumption habits are such that they buy their own cars, not ours,” Trump complained.

The lack of interest in US cars pokes him so angry that he made a real deal. The EU is also shy of agricultural products, “it is not even an inch, they have a wall,” he complained, without mentioning that the dispute is also a fundamental conflict over the handling of GM food. Overall, Trump said, the EU is “almost as bad as China – only smaller”.

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With the criticism of the President also his European “friend”, the “great Jean-Claude” Juncker, the head. Both politicians had agreed at the end of July in principle on the extensive reduction of almost all industrial duties, but excluding the sensitive topic cars. The head of the European Commission said on Friday on ZDF, he assumed that the ceasefire with the US will hold. When asked what would happen if Trump made his earlier threat true and charged import cars from Europe with high duties, he said: “Then we’ll have to do that too.”

On Trump’s new attacks Juncker reacts with resistance

 The US president went even further, accusing Europeans of manipulating the course of their currency with China. The aim is to harm US companies and torpedo Trump’s efforts to reduce global trade imbalances. “Not only do we compete with the yuan, we also compete with the euro, they fall, fall and fall”, he said – which, however, is not factual in relation to the euro. Trump also criticized once again the decision of Chancellor Angela Merkel to buy more natural gas from Russia. “I told her that from my point of view, it’s ridiculous to have a NATO to defend against a particular country and then to transfer that land to a fortune,” he said. “What kind of deal is that supposed to be?”

According to US media reports, the president is also ready to push the trade conflict with China further to the extreme. Trump is expected to order by the end of next week, to impose punitive tariffs on Chinese goods worth another $ 200 billion on importation into the United States, it said.

Perhaps even more serious is his threat to withdraw the US from the World Trade Organization (WTO). Should this actually happen, the president would have smashed an essential pillar of post-war economic policy. Trump, who believes the US is systematically discriminated against by the WTO, described the agreement to found the organization in the interview as “the worst trade deal ever concluded.” This is also noteworthy because he had always reserved this title for the Nafta contract so far.

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