Brokers warn of the dangers of market blockage: in fact, the loan rejection rate has reached record levels, which is directly related to the rate of wear.
For the first time, 6 professional associations of Intermediaries in Banking and Payment Services (IOBSP) – CNCEF, Afib, Anacofi, Apic, CNCGP and La compagnie des CGP – conducted a survey of the Opinion System for Intermediaries in Credit (1,471 respondents) In order to identify and highlight the obstacles to their activity, in particular corrosion rates and HCSF standards.
The aim of this survey is to provide market actors, as well as the Ministries of Housing and Economy, with representative statistics on loan denials in order to raise awareness of the difficulties facing the profession, but also and especially of those who currently wish to have access. property, with the risk of a market blockage if nothing is done to remove the restrictions currently burdening the granting of credit.
For 40% of credit brokers, more than 4 out of 10 files are rejected
1Verse The lesson from this survey relates to the rejection rate observed by IOBSPs since the beginning of the year. ” We have never had so many rejections on our files submitted to banks. For 40% of our brokers, 40% of files are rejected, and 85% are over 20% rejected. The results are screaming about the problems that borrowers face in obtaining financing for their real estate project », notes Bruno Rollo, President of APIC.
Reason #1 for rejection: wear rate for 36% of files followed by HCSF standards for 31% of them, two major barriers to accessing credit since the beginning of the year, which is therefore almost 7 rejections out of 10!
On the banks side, the main reasons given to explain the non-support of files submitted by IOBSPs is the wear rate also exceeding 39% of the files, or the fact that the borrower does not match their files. Criteria 27% of the files. It should be noted that only 15% of files rejected by banks are related to the fact that the file comes from a credit intermediary.
Banks ask for fees to be reduced so as not to exceed the wear rate
In an effort to pass a file despite the erosion rate, 18% of banks systematically require lower brokerage fees, with the goal of lowering the annual interest rate, and 43% often request them.
” If the increase in rejections is not specifically related to the banks’ mistrust of dealing with intermediaries but more to the level of usury rates, then we feel aggrieved when the banks systematically ask us to lower our fees even if in the current period, we are seeing an increase in the workload on each File of credit files. However, since the main thing is to come to an agreement for our clients, we are prepared in some cases to do what is necessary … However, we hope that requests for lower fees related to the context will be very temporary and not jeopardize the sustainability of practices Bruno Rollo explains.
In addition to this demand for lower fees, there has been a decrease in the number of loan applications since the beginning of the year. In fact, more than half (56%) of brokers saw a drop in demand of 0-25% and more than a third of brokers (36%) experienced a drop of between 25-50%.
” Fortunately, only 10% of brokers saw a demand drop of more than 50%. Thus, the current period is doubly complicated because there is a decrease in demand associated with the wait-and-see attitude of buyers, but also a decrease in the supply of credit with banks that discourage banks to lend in the context of low profitability of loans granted “, Complete.
The rate of interest affects all borrowers
In terms of the files most affected by rejections related to the rate of wear, we find 71% of buyers of a primary residence, followed by investors at 24%.
All profiles combined, borrowers between the ages of 30 and 55 are the most affected according to 51% of intermediaries, i.e. the bulk of the market … ” The wear rate has become the main problem of access to finance, it is of interest to all borrowers, whatever their age or project, which is why we wish to alert, with the whole profession, to the risks of excluding the increasing number of buyers which has led to a blockage of the real estate market Bruno Rollo regrets.
” We shouldn’t be fooled by the stats on producing new balances for the first period of the year, which mainly include accepted files at the end of 2021 or the beginning of 2022. The sudden slowdown we’re seeing will be turned into numbers in the fall, with strong lethargy before a possible resumption in 2023 that will spread over several months. This is more so because the appetite of the candidates to join has hampered banking in the processing of projects, which are now often put on hold due to evolving market conditions. Bruno Rollo says again.
“ It is necessary to stick better to the reality of interest rates, to restore a reprieve to the banks, whose ability to control their risks with households has been welcomed in many circumstances, to enable them to cushion this blow.. stop. Finally, we must reconsider the importance of the recommendations of the Supreme Financial Stability Board, the effects of which are exacerbating the downturn. With more than 20% of the average down payment on projects, customers will not be able to do more, and there is not enough alternative in terms of the available rental supply, which has been significantly affected by inflation. Concludes.
Survey conducted by OPINION SYSTEM between July 8, 2022 and July 22, 2022 – 1471 participants