SHOULD WE BE WORRIED ABOUT THE END OF CRÉDIT FONCIER?

After the decision to dissolve Credit Foncier (formerly Credit Foncier de France, the last bank specialising in real estate), it is clear that this disappearance may pose a threat to the real estate projects of households.

SHOULD WE BE WORRIED ABOUT THE END OF CRÉDIT FONCIER?
SHOULD WE BE WORRIED ABOUT THE END OF CRÉDIT FONCIER? 


A DISAPPEARANCE THAT FOLLOWS OTHER PRECEDENTS


Crédit Foncier is not a financial institution but a specialized institution that goes back to Emperor Louis Napoleon Bonaparte. This institution specialized in real estate is linked to the government housing policy.


Crédit Foncier puts its know-how and experience at the service of home ownership and rental investment. He is also involved in construction and real estate development.


This institution is the latest victim of a long series of disappearances such as Crédit Immobilier de France, Henin, Comptoir de l'Entrepreneurs, UCB and Woolich.


These specialized establishments have generally fished by the lack of critical size and the impossibility of access to a guaranteed refinancing.

Thus, government policies in terms of housing have largely contributed to these losses:

  • Large-scale rental investment operations that resulted in failures
  • Variable rate loans granted to non-creditworthy borrowers
did not improve the situation of the specialised establishments.

The economic problems linked to the stock market crises have finally damaged property development programs.

POSITIVE POINTS RELATING TO SPECIALIZED INSTITUTIONS

These financial institutions had a certain expertise in real estate and allowed:
  • To infuse a dynamic in terms of popular access to property and private rental investment.
  • To highlight the proper fiscal and financial engineering.
  • Provided security for loan mounts.
  • Valued the property despite the personal side of a home loan.

THE FUTURE OF FINANCING HOUSEHOLD REAL ESTATE LOANS

After the disappearance of these specialised institutions, the future of personal loans financing seems random.

Although primary banks have managed to assimilate the experience and know-how of specialized institutions, the question remains unresolved.

The case of Crédit Agricole, which is positioning itself as the leader in private financing, is nevertheless puzzling.

Crédit Agricole has a network of developed agencies and efficient distribution means.

 This bank owns one third of French real estate financing and has a solid knowledge of the local market, the local heritage as well as the sociology of borrowing clients.

All these assets prove to be largely insufficient. The theme of insurance and the possibility of matching products to the various needs of borrowers remain major issues.

In addition, account must also be taken of the adaptability of debt durations in relation to the many profiles. Primary banks tend to charge high interest rates to households at risk for 30-year debt durations.


Lastly, special statuses must be taken into consideration, such as the self-employed, the fixed-term contract and temporary workers.


thanks for the time .

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