New restrictions for US citizens getting mortgages?

18 posts in this topic

After more than three years of looking for a property to buy, my husband and I finally found one and applied for a mortgage. We just heard from the mortgage broker (Allianz) that apparently there is a new law that went into effect on March 1, 2020 which restricts US citizens from obtaining mortgages. I could not find any information about this online, but maybe I’m just not searching for the right terms.

 

A little background information (not sure if it is all relevant, but then again I never expected that my US citizenship would be a problem): Neither my husband nor I are EU citizens; my husband is not a US citizen either.  We both have permanent residency (Niederlassung) here and both work here.  He is the primary breadwinner, but I will be contributing the bulk of the down payment (about 30% of the purchase price, plus the closing costs). This money is coming from my US account; I was planning on transferring it into a German account.

 

The mortgage broker said that, because of these new restrictions, the loan and therefore the property could only be in my husband’s name. If we wanted to have any provisions for what might happen if we were to separate/divorce some day, these could only be done in a postnuptial agreement (Ehevertrag).  In addition, I would need to gift my husband the money for the down payment, since the contract for the house would only be in his name. 

 

My questions are:

 

1.  Is this true? If so, could someone please post a link to where I can find this information online (no problem if it’s in German)?

 

2. Are there any other alternatives in which I could remain as one of the owners of the property?

 

3. If the property must remain in only my husband’s name, what implications would that have later for inheritance taxes for each other or for children? The property value is definitely over the tax exempt amount (Freibetrag).

 

Thanks!





 

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are you freaking kidding?  

 

I hope they are wrong but ffs real estate was the last bastion for any kind of investment for americans in Germany 

 

if true this is just egregious.

 

 

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I am really hoping that they are wrong too!  

 

It seems inherently unfair that the German government can tax US citizens (on income, capital gains, inheritance, etc), but not allow US citizens to take out mortgages.

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yeah but if it's true it more likely has to do with US regulations that banks here don't want to deal with.

 

it's US nonsense that prevents us from having girokontos and the like.  I would not blame Germany first on this one.

 

eta:  I find it ironic that part of the formal "giving up US citizenship" form makes you indicate you are giving up "the full protection if the United States of America" - who needs this shit?

 

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So the mortgage broker has informed us that the new law is indeed from the US side, but that the result is that many financial institutions in Germany are now refusing to give US citizens loans/mortgages.  He wasn’t sure which law that is and, again, I couldn’t find anything online.  Does anyone have an idea what law this could be?

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I am checking with our mortgage expert (who is currently in lockdown in Spain... ) but I have not heard anything. But as was said above, it is definitely not the German government doing anything here on the law-side of things but rather the SEC or  IRS in the US coming up with some new regulation that makes it for German banks simply too complicated or risky financially to lend out to US-nationals. If that is the case at all... will know more soon, but will take some time.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
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So I seem to have an received an answer to my first question.  I was told that the law is from the US side. Since Allianz has offices in the US, US citizens—even if they are living abroad and the loan is issued abroad— have a right to sue/pursue litigation against Allianz in the US according to US laws.  For this reason, Allianz (and many other lenders) will not issue loans to US citizens.  Apparently this is their policy, though the lender we have been dealing with wasn’t able to find to get a copy of this policy in writing from the colleague who informed him about it.

 

So, a new question (in addition to questions 2 and 3 above): is it legal to have such a policy that discriminates against people based on national origin?  In the US, there is the Equal Credit Opportunity Act, which states that a creditor may not discriminate against an applicant based on the applicant's race, color, or national origin.  Is there any comparable non-discrimination law in Germany?

 

Unfortunately, the terms of the loans from the handful of lenders who don’t have this restriction are not nearly as good (higher interest rates, shorter mortgage term, etc.) as the offer we received from Allianz.

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Today we received the rejection letter from Allianz.  It did not state any reason for the rejection. („...wir haben Ihre Finanzierungsanfrage geprüft. Leider sehen wir keine Möglichkeit, uns an der von Ihnen vorgesehenen Finanzierung zu beteiligen.”)

 

Are lenders required to give a reason for a rejection?  I was told on the phone by the broker here in Munich, but he mentioned that the rejection letter (from Stuttgart) would not give the reason. Can we request/demand that Allianz tells us in writing why we were rejected?

 

As for the anti discrimination laws, I found the ‘Allgemeines Gleichbehandlungsgesetz’ and see that it includes discrimination against ethnic origin, but not explicitly nationality/citizenship, although the Antidiskriminierungsstelle des Bundes has called for the law to be expanded to include nationality and language.

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Read this:  https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

 

Also read this:  https://en.wikipedia.org/wiki/Bank_secrecy

 

German banks need to obey the American FATCA, but also must obey the European laws concerning Bank secrecy.

 

This is literally a walk on eggshells, so the banks have the propensity to refrain from getting involved in legal borderline cases just for a peanut business like a mortgage on a house.

 

Their legal department has bigger fish to fry.

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I'm currently working with a broker on a commercial mortgage (they're a middle man working with several banks). He mentioned that having my Niederlassungserlaubnis is very beneficial for approval but made no mention of restrictions because I'm a US citizen. Maybe try these guys: https://www.okfinanz.eu/

They are in Stuttgart but maybe work nation-wide.

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On 3/28/2020, 10:15:23, elmix said:

Today we received the rejection letter from Allianz.  It did not state any reason for the rejection. („...wir haben Ihre Finanzierungsanfrage geprüft. Leider sehen wir keine Möglichkeit, uns an der von Ihnen vorgesehenen Finanzierung zu beteiligen.”)

 

Are lenders required to give a reason for a rejection?  I was told on the phone by the broker here in Munich, but he mentioned that the rejection letter (from Stuttgart) would not give the reason. Can we request/demand that Allianz tells us in writing why we were rejected?

 

As for the anti discrimination laws, I found the ‘Allgemeines Gleichbehandlungsgesetz’ and see that it includes discrimination against ethnic origin, but not explicitly nationality/citizenship, although the Antidiskriminierungsstelle des Bundes has called for the law to be expanded to include nationality and language.

 

How much deposit did you put down?

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I have an American friend of mine who gave up his US citizenship and became German. The US seems to think it 'owns' their citizens. The IRS create laws which mean the only way out, seemd to be really out of the USA, period. It's strange, as a Brit I get asked all the time when dealing with financial things, are you American. If the answer is yes, they don't want to know. I can understand the frustration this must cause people.

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On 24/03/2020, 11:11:52, Starshollow said:

I am checking with our mortgage expert (who is currently in lockdown in Spain... ) but I have not heard anything. But as was said above, it is definitely not the German government doing anything here on the law-side of things but rather the SEC or  IRS in the US coming up with some new regulation that makes it for German banks simply too complicated or risky financially to lend out to US-nationals. If that is the case at all... will know more soon, but will take some time.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.

Hey Starshollow,

were you able to get an answer from your mortgage expert?
I asked someone from Hypofriend, but the answer they gave me wasn't really vague.

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@elmixsorry for only getting this now, but there was nothing official brought into law from March 2020 that would put restrictions on US citizens borrowing. The FATCA regulations that @franklanmentions is something completely different regarding investments for US citizens overseas.

It’s more likely that Allianz perhaps changed their own criteria on that date with regards to lending generally as the market was volatile and there was a LOT of uncertainty due to Covid concerns at that point.

I would say it was just bad timing and an internal tightening of the belt in Allianz than anything else.

And your Allianz “Broker” is not a Broker if tied to Allianz 😊.

I hope you got your home in the meantime!

And I hope that answers your questions also @VisualGeologist

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