Brokers already knew that borrowers were not reading their loan offer. The mediator’s annual report to the French Banking Federation (FBF), Mr. Lauren Dy, confirms this. Accessing the property is based on the promises of its banker. The mediator’s report highlights the growing interest takes banking mediation in personal life. 2013 saw an increase in the number of referrals, which is also linked to economic circumstances. Here is a summary of the problems encountered by individuals and the solutions to be provided.
What are the disputes about?
In 2013, the disputes for which the FBF mediator was referred mainly related to credit operations. Bank account operating problems were also encountered. The Ombudsman also dealt with problems relating to means of payment, in particular bank cards and online payments.
He noted the arrival of disputes over savings products, and fewer cases concerning life insurance contracts and other financial investments.
The average amounts in games decreased compared to 2012. In 2013, files involving sums greater than € 500 represented 46%, whereas there were 58% in 2012.
Reasons for the rise in requests for mediation
In times of crisis, even costs of a few tens of euros become significant. When an individual finds himself in a situation of over-indebtedness or that he simply sees a reduction in his income, he is obliged to be more strict on his budget.
In addition, the economic crisis has changed the way customers look at their bank. They hold their bankers responsible, and have the firm intention of not paying a penny too much.
Banking mediation therefore takes up more and more space in relations between the bank and its customers. They also have access to information via the Internet, and quickly know if their case falls within the prerogatives of the FBF mediator.
A new site to enter the mediator
The federation of French banks has put online a site specially dedicated to the referral to the mediator. Individuals no longer need to write a letter, and files are processed more quickly. There is no doubt that this very useful tool will allow consumers to understand their situation in more depth.
Only 27 files were completed
In reality, the mediator is mainly forced to explain the situation to individuals. Of the 1575 applications received in 2013 and within its jurisdiction, the Ombudsman has reached agreement on 27 of them. He had to send 601 explanatory letters to clarify the situation.
Because very often it is the bank that is right.
Need more information
The FBF mediator indicates in his annual report the presence of a “general ignorance of the basic principles governing the banking profession”. He would like consumer associations to be invoked more often by bank customers. Their members have the necessary skills to mediate with banks and credit organizations.
Early repayment clauses present
The FBF mediator has dealt with borrowers who were unhappy to see that the promises made at the signing of their loan contract were not kept. The latter believed that they had negotiated the lifting of prepayment penalties after a certain number of years.
So when it came to repurchasing credit, it was not unpleasant to see that their bank was charging them early repayment indemnities. In reading their contracts, the mediator could only note the irrevocable presence of the said clauses.
Unfortunately, the borrower had not read either his prior loan offer or his final contract. However, in most of the files, the mediator was able to obtain a commercial gesture from the bank.
Interest not too surprising
Some mediation referrals have concerned borrowers wishing to adjust their repayment. Home loan contracts offer the possibility of reducing the amount of monthly payments, or even suspending them for a certain time in the event of financial difficulties.
But this kind of provision is never free. Many credit organizations attract borrowers in times of crisis, emphasizing the modularity of the maturities. They forget to tell their customers that they will have to pay interim interest.
Or, the prospective borrowers negotiate the raising of interim interest, but do not check whether this provision is clearly mentioned in the contract they sign.
Smooth and complicated home loans
The mediator of the FBF finds that many mortgage agreements include “more complex financial packages offered by banks.” Often, banks use the principle of smoothing credits, in order to allow their customers to borrow without exceeding the limit debt ratio of 33%. However, sometimes an explanation is not given to the borrower.
This lack of clarification is a source of disputes between the lender and the borrower.
Get advice for your mortgage
The role of the mortgage broker is to advise his client. At Good Finance, the first contact begins with an interview that will allow the broker to understand his client’s projects.
We will meet again a second time to check all the documents necessary for the mortgage application, then there will be a third interview. The brokers of Good Finance will be present with their clients during the final signing of the mortgage contract.
Previously, they will have ensured that the prior offer given to their customers includes all the points previously negotiated.