What does this mean for your company?

Will your implementation project be ready on time?

Have you actually considered all the important aspects?

Do you still have open questions and problems?

The new reporting requirement on residential real estate loans is coming closer!

What does this mean for your finance company?

On September 29, 2021, the Deutsche Bundesbank published the final version of the guideline for data collection on residential real estate financing to implement the Financial Stability Data Collection Regulation, or FinStabDEV for short.

What does that mean for you?

It is necessary, already at the beginning of the first quarter of 2023, to gather the information needed for reporting. Quarterly reporting is provided. However, the exact reporting frequency depends on the amount of new loans originated per year.

The first reporting deadline for large (M1) credit institutions, banks, investment companies and insurance companies is already March 31, 2023, and the first submission deadline is therefore May 15, 2023. For smaller institutions (M2 and M3), the first deadline falls on Dec. 31, 2023, and the associated deadline is Feb. 15, 2024.

Overview reporting category

Source: Guidelines for data collection on residential real estate financing as of 29.09.2021, p.8

It’s high time to tackle the implementation!

The aim of this new notification is to provide national regulators with a data basis for assessing risk in the real estate lending market. If these reports identify threats to financial stability, countermeasures can be initiated.

This not only requires reporting of new residential real estate loans (new business) to private individuals, but also information on existing business.

New message, new data!

FinStabDEV requires many new data attributes and metrics (more than 20!) resulting from the data requirements. This includes information on cumulative recoveries since loan defaults, information on subsidized loans, internal bank risk figures, and data on the property itself – be it the financed property or, if different, a second collateralized property.

Problems can arise in particular with the availability of already existing information such as mortgage lending values, market values or also previously technically deviating defined key figures and values. As FinStabDEV is a purely statistical report, special care must be taken not to interfere with other reports – especially quantitative, supervisory reports.

The FinStabDEV requires a large number of new key figures, which are not readily available in an automated technical form. However, the basic information for this has long been collected as part of the regular lending processes.

If this data is not available in your systems in the required granularity, at the right times or in sufficient quality, there will be a considerable effort to adapt and implement your data models and your data supply.

Specific challenges

  • Have you rolled out the necessary process adjustments in your company? Are the manuals and guides of the credit departments adapted?
  • Do these match the regulatory requirements of the new notification?
  • Are all property appraisals available at the time of loan origination? In which cases are provisional valuations to be used.
  • What is the significance of the inventory data? And what new business information must be maintained for existing business even after the initial report?
  • Are the relevant borrowers correctly delineated? Are commercially operating natural persons to be reported in FinStabDEV or in AnaCredit?
  • How should forward loans and follow-up financing be handled? How should a changing lender be considered in this context?
  • How should financing with true real estate loan splitting be counted?
  • Is the recapture mandatory and complete?

ADWEKO helps you to identify and implement the necessary adjustments to your data budget – even at short notice. We can advise you on business concepts, business analysis and data integration, technical implementations and testing.

Marco Tönjes
Senior Solution Architect

Adam Kotwal
Junior Consultant

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