Mortgage Bank Act

Jahre Hypothekenbankgesetz, Textsammlung und Materialen, Verband Deut-scher Hypothekenbanken, Frankfurt/Main, 1999. (100 Years Mortgage Bank Act, A Collection of Texts and Material, published by the Association of Mortgage Banks, Frankfurt/Main, 1999.)... 

The Hypothekenbankgesetz (Mortgage Bank Act) states that mortgage banks may only be engaged in two types of business ... 

It is worthwhile noting that there has not been a bankruptcy proceeding against a mortgage bank since the enactment of the Mortgage Bank Act over 100 years ago. 

The three mixed mortgage banks are now the exception mortgage banks founded today may only be done so as pure mortgage institutions. The existing mixed institutions retain their status as they were engaged in other banking activities prior to the Mortgage Bank Act of 1900. 

As mentioned previously, the mortgage banks are monitored by BAFin, in close collaboration with the Deutsche Bundesbank and are bound under the requirements of both the Mortgage Bank Act (HBG) and the German Banking Act (KWG). 

On 1 Jnly 2002, the amendments to the German Mortgage Bank Act finally came into force. The main ambition of these changes was to allow the Pfandbrief market to compete on a more level playing field with their np and coming foreign rivals. 

New and sophisticated covered bond laws, offering significant improvements to the original Pfandbrief model, have been introduced in France, Spain, Luxembourg, and now Ireland. Germany has responded with its amendments to the Mortgage Bank Act. 

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