Germany’s real estate market is treading on dangerous ground as a new wave of risky lending practices emerges. Dubbed “quasi-NINJA” mortgages, these loans echo the infamous “Ninja Mortgages” of the 2008 crisis, given without thoroughly verifying the borrower’s stability. Banks are now underwriting loans that cover 100% or even 110% of a property’s value, as long as the borrower has a job—regardless of how stable or sufficient their income is.
This reckless approach mirrors the behavior that fueled the 2008 financial collapse, raising alarm bells for a potential crisis in Germany. With house prices currently falling, many borrowers could find themselves trapped in negative equity, owing more than their homes are worth. If this trend continues, the consequences for Germany’s real estate market—and its broader economy—could be devastating.
A lot of talk around the German economy health going from bad to worse, but still no one is talking about this
Narrator: hopefully Unicredit is running a proper DD on Commerzbank books not a $UBS style one t.co/j0DdJbgPkE
— JustDario 🏊♂️ (@DarioCpx) October 7, 2024
Sources:
en.wikipedia.org/wiki/No_income,_no_asset
German #business 📉 👀t.co/xLPdzGmnXj
— Invariant Perspective (@InvariantPersp1) October 7, 2024
Exactly same feedback I got when I travelled to Germany few months ago, many also are stuck into mortgages they cannot afford anymore t.co/uLahj0vIjE
— JustDario 🏊♂️ (@DarioCpx) October 7, 2024