Daniel Fiebig's dream house would almost have become a nightmare. After a long search, he decided on a semi-detached house in Braunschweig. A developer wanted to develop and build it. Fiebig scraped together as much equity as possible and worked out a tailor-made financing with a financing advisor from the online bank DKB - including a government-favored KfW loan. The loan should be paid in stages and thus the developer should be paid. Construction began in summer 2019. At first everything went as planned. But Fiebig now fears that he has chosen the wrong financing partner.
This article comes from the "WirtschaftsWoche".
Because the corona shutdown thwarted him. Before the borders were closed in March, many Polish construction workers had traveled back home - and could then no longer return to the construction site in Germany. Construction work on Fiebig's house was also delayed when parts failed to appear. The manufacturer of precast concrete parts for the floor had to stop production due to the pandemic. The loan continued to run at DKB while construction was suspended.
Only: Fiebig could not call the money without a partial invoice for the shell. Since February, he has paid commitment interest of more than 0.25 percent per month for the undrawn portion of his building loan. Annualized, that's a good 3.0 percent - more than double his regular loan interest. Even for the KfW loan over 100,000 euros, he has to shell out 0.25 percent commitment interest per month. In total, that was 602 euros, which he had to pay each month in addition to the rent and the due loan installments for the part of the loan that had already been called.
Fiebig turned to the DKB and asked for further postponement with reference to the corona-related construction freeze. He even offered to pay the lower loan rate of around 1.2 percent instead of the commitment rate. But the DKB did not get involved with reference to its refinancing costs. Fiebig is upset: "DKB and KfW make money on Corona," he says against the banks. "That's what's stuck with me. I find that disappointing."
A neighbor of Fiebig had the same experience with HypoVereinsbank. Niels Nauhauser from the Baden-Württemberg Consumer Advice Center considers the reference to the refinancing costs of the banks to be a flimsy excuse. The institutes could currently refinance construction loans at very low cost. "Because banks simply expand their profit margins in the low interest rate phase in a bold way. Given loan interest of only one percent, commitment interest of two to three percent is usury." In the meantime, the consumer advice center is suing institutes that charge disproportionately high provision costs and commissions. But it will take years before a judge's decision is reached.
Deployment interest due to construction delays are just one of several problems that builders and property buyers are currently facing. "This is currently a classic case. There are no construction workers everywhere or there are supply bottlenecks with the material," confirms Jens R. Rautenberg, Managing Director of Conversio, an analysis company for residential properties. "In the end, the property buyers stay on the damage."
Even more frequently, homeowners with current loan contracts have the problem that they can no longer pay their loan installments due to loss of income - for employees due to short-time work or unemployment, for the self-employed due to order shrinkage or closed business orders. So what can borrowers do who are unable to pay their monthly installments due to the crisis and therefore no fault of their own? How far must banks and mortgage lenders meet them, what conditions apply, what negotiation options do they have - and how do they assert their legitimate interest?
The right to a break in payment
At least one thing is clearly regulated by law: On March 27, the Federal Government explicitly allowed debtors in the Corona Mitigation Act to suspend their contractually agreed installment payments from loan agreements until June 30. This would extend the loan term and interest payments by three months. The prerequisite is that the loan was taken out before March 15, 2020 and the debtor's solvency is limited by the corona crisis. Building finance providers are therefore obliged to defer interest and principal payments at the borrower's request until the middle of the year. The regulation could also be extended again.