Mortgage Bank, Pfandbriefe & Real Estate Loans

Hypothekenbank is an obsolete name for a Pfandbrief bank since 2005. In purely legal terms, mortgage banks are Pfandbrief banks, but some mortgage banks were allowed to keep their name. Pfandbrief banks are credit institutions whose banking business is to acquire mortgages, pool these mortgage Pfandbriefe and place them on the capital market. They are licensed to trade in Pfandbriefe by the Pfandbrief Banks Act. The money received through the sale of the interest-bearing and covered bonds in the form of Pfandbriefe is lent by the Pfandbrief banks in the form of real estate loans, loans to states, federal states and municipalities as well as for ship and aircraft financing. Compared to other financial investments, Pfandbriefe are safe. In the event of insolvency, the Pfandbrief holders’ claims take precedence over those of all other creditors, but of course the chances of winning are not high if the security is high. In Germany, almost every bank now offers services in the field of Pfandbriefe and mortgage bonds.

Mortgage Bank at a glance

  • Hypothekenbank – obsolete name for Pfandbriefbank
  • Pfandbrief – secured and interest-bearing promissory note
  • Business: purchase, aggregation and sale of mortgages and granting of loans
  • Many German banks offer services in the area

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