Countdown for loan withdrawal: Take action by June 21 deadline

Countdown for loan withdrawal: Take action by June 21 deadline

Countdown for loan withdrawal: Take action by June 21 deadline

http://www.grprainer.com/en/legal-advice/banking-law.html
The countdown is on for withdrawing from real estate loans. The deadline for withdrawing from legacy contracts is June 21, 2016. After this date, the so-called „ewiges Widerrufsrecht“ (perpetual right of withdrawal) will cease to exist.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: By withdrawing from a loan concluded between 2002 and 2010 for the purposes of real estate financing, consumers may be able to save five-figure sums of money. The extent of any savings depends on the loan amount and the respective conditions regarding interest rates. However, this perpetual right of withdrawal for these agreements will cease to exist on June 21, 2016 as a result of a change in the law. Consumers who wish to withdraw from their loans can turn to a lawyer who is versed in the field of banking law. He can assess whether the criteria for withdrawal from a loan have been fulfilled.

Generally speaking, it remains possible to withdraw from a loan even years after it has been taken out if the bank or savings bank made use of flawed guidance on the right of withdrawal. According to research conducted by the consumer organisation Verbraucherzentrale Hamburg, this is true for a very large proportion of the real estate loans concluded between 2002 and 2010. It is often the case that even minor deviations in substance or form from the respective standard guidance render guidance regarding the right of withdrawal faulty. Consequently, the withdrawal period never commences and it is still possible to this day to withdraw.

That being said, one ought to anticipate that banks and savings banks will not simply accept withdrawal. Particularly in light of the fact that this „perpetual“ right of withdrawal will soon come to an end, they might well try to ride out the last few weeks until June 21 and play for time. Consumers should therefore be persistent, as the legal situation is clear in most cases. The arguments commonly advanced by the banks such as that the right of withdrawal has been forfeited or exercised in bad faith have since been rejected by various courts, with the result that the established jurisprudence in this area is consumer friendly.

Withdrawal from a loan gives consumers the opportunity to restructure their debts under favourable conditions and benefit from the ongoing low interest rates. In the case of loans that have already been prematurely paid off, it is also possible to recover the early repayment penalty if withdrawal is successful.

http://www.grprainer.com/en/legal-advice/banking-law.html

GRP Rainer LLP is an international law firm with lawyers and tax advisers specializing in business law, commercial law and company law and tax law. The attorneys counsel international commercial and industrial companies and corporations, as well as associations, mid-sized businesses, institutional investors and private individuals worldwide from offices in Cologne, Berlin, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart, Germany and London UK.

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