Facilitating the purchase of a property… and overindebtedness? The Minister of Economy, Bruno Le Maire, has advocated for a relaxation of the conditions for granting mortgage loans in an interview with Le Parisien, published online on Saturday, December 2. « We will study new measures to further relax the conditions for granting credit, » the minister assures. He wishes to establish an « amicable procedure, between the borrower and the banker, when the latter refuses a mortgage loan », in order to « help understand why the loan was refused and, if the borrower’s situation allows it, potentially lead to a reconsideration of the decision. » These comments come two days before a meeting of the High Council for Financial Stability (HCSF), a body chaired by the Minister of Economy that reviews the rules for granting mortgage loans every quarter, including their duration and their weight relative to borrowers’ income.
Some participants in the mortgage credit market, such as brokers, are calling for the removal of the maximum debt-to-income ratio. This ratio limits the ability to take out a mortgage loan if the repayment exceeds 35% of the borrower’s income. However, the HCSF also includes the Governor of the Bank of France, François Villeroy de Galhau, who emphasizes the risks of making borrowing too easy. « It is desirable for bank credit offers to gradually pick up now, but without risking overindebting households: beware of suggestions to forget the common-sense standards of the HCSF, » the Governor of the Bank of France declared in an interview with Le Républicain Lorrain on November 22. In November, he highlighted « the continuous and significant increase in household debt », as well as « the pronounced drift in loan durations and repayment burden. »
The next HCSF meeting will therefore examine « possible new technical adjustments, provided they do not increase the risk of overindebtedness, » warned François Villeroy de Galhau.
In this article, the information is sourced from interviews with Minister Bruno Le Maire, the Governor of the Bank of France François Villeroy de Galhau, and various market participants like brokers. It is important to evaluate the reliability of these sources. Both Bruno Le Maire and François Villeroy de Galhau hold prominent positions in the French government and financial institutions, respectively. Their statements and opinions can be considered reliable, as they are key decision-makers in matters related to the economy and financial stability.
The inclusion of comments from market participants, such as brokers, provides different perspectives on the issue of relaxing mortgage loan conditions. However, it is important to verify the credibility and expertise of these sources to ensure their statements are accurate and representative of the broader market sentiment.
In summary, the article discusses Minister Bruno Le Maire’s support for relaxing the conditions for granting mortgage loans and the potential creation of an amicable procedure between borrowers and lenders in case of loan refusal. It also highlights the opposing views within the High Council