Nearly 30% of housing loans are now granted through brokers. A recently regulated profession that bridges the gap between banks and the borrower. But what exactly is their contribution? Our investigation.
Not far from forty. This is the time it took the brokerage real estate credit to prevail in the French banking landscape. Appeared in the early 1970s, the activity has long remained marginal, seen as a spare wheel for borrowers unable to obtain funding via conventional channels. It did not really become democratized until the turn of the 1990s, the development of the Internet and the real estate boom gradually giving it a new visibility. Its place, now, seems consolidated.
An independent actor?
Mas who are the brokers? This profession is now firmly governed by the law of 22 October 2010 on banking and financial regulation (Law No. 2010-1249, published in the Official Journal of 23.10.10), which reform the Monetary and Financial Code and aims in particular to “Strengthen the obligations of financial services professionals to their customers”. Article 36 of the text, specified by three decrees (nos 2012-100 and 2012-101 of 26.1.12 and 2012-297 of 1.3.12) and two decrees taken in 2012, establishes a statute for intermediaries in operations. banking and payment services (IOBSP); within this family, he distinguishes the brokers, mandated by their clients under a brokerage agreement, from agents, who, in turn, hold their status as IOBSP under a mandate received from one or more several credit institutions (see box “Agents: who is who?”). “The distinction is crucial,” says Philippe Taboret, president of the professional association of credit intermediaries (Apic) and deputy general manager of brokerage firm Cafpi. Before, the broker depended directly on his banking partners. The 2010 law made him a totally independent player, linked to credit institutions through commercial agreements, but working for the exclusive account of his client: the borrower. “
Code of good conduct
This new autonomy goes hand in hand with a series of regulatory constraints (Article R. 519-21 and following of the French Monetary and Financial Code), with regard to professional capacity, liability insurance or financial guarantee. A code of conduct stipulates that the broker must not only inquire about the “knowledge”, “experience”, “needs” and “financial situation” of its clients, even potential ones, but also “enlighten them”. on the extent of [their] duties and obligations “, and detail” the reasons that motivate his proposals “. These must be presented with “clarity and accuracy”, kept on a “durable medium” to which the customer “has easy access”.
The broker must also be transparent about the number of his banking partners and the nature of the links he has with them. He must specify in particular if he realizes more than a third of his turnover with a given establishment or if another holds more than 10% of his capital. Finally, the law imposes a registration with the Organization for the registry of insurance intermediaries (Orias), responsible for verifying that professionals meet the legal requirements and are qualified to practice.
On the road to transparency
Updated twice a month, this register is accessible free of charge to individuals from the organization’s website (www.orias.fr, under the heading “Find an intermediary in the register”). In addition to this audit, brokers, like other financial institutions, are placed under the watchful eye of the French Prudential Supervisory Authority (ACPR) of the Banque de France.
Transparency should henceforth preside over the exercise of this still relatively new profession, but it must be recognized that while credit brokers are very eager to communicate about their services, they are a little less eager to answer their market shares. and their banking partnerships. However, if we believe Philippe Taboret, the obligations that now weigh on the profession have given him his nobility and attest to its usefulness.
Time saving, but not only
But what is the broker really worth? According to Serge Maître, secretary-general of the French Association of Bank Users (Afub), credit brokers offer the advantage of “saving precious time for borrower households, which they dispense with the effort to make the banks turn to defend their case.
An undeniable comfort, which can justify on its own that one speaks to them. The advocate of users, however, is more reserved as to the financial interest of the approach. “Given the historically low level of borrowing rates, there is no way to assert a priori that an intermediary will negotiate a significantly lower rate than that the borrower could obtain alone,” says Serge Maître.
An argument of common sense, apparently, that the brokers are however trying to disassemble. Thus, at VousFinancer.com, Sandrine Allonier recognizes that “some customers can get a favorable rate, if they know how to negotiate or if they are lucky. That said, a broker, because he is in regular contact with many, if not all, of the lending institutions, knows, at the moment t, to whom to address a given borrower, according to his profile and his project . Because, contrary to a widespread idea, each bank practices, for the same duration, different levels of rates according to the age, the professional situation, the level of contribution and income of its potential customers and the destination of the credit requested ( primary or secondary residence, rental investment …). Not easy, therefore, by contacting banks themselves, to know which has the scales best suited to his profile.
The task is all the more complicated because these same scales are updated regularly, depending on the economic and monetary environment, on the one hand, and the business strategy and objectives of each institution, on the other. “Once or twice a month, sometimes more, each of our partners sends us a price list, explains Ludovic Huzieux, co-founder of Artemis Courtage. It is on the basis of these grids that we can play the competition and discuss, on a case by case basis, the best possible conditions. This negotiation is facilitated by the fact that brokers, who brew a large volume of files every month, end up playing the role of wholesaler on behalf of their clients; In addition, they benefit from access to more direct and more efficient file processing channels than borrowers.
“In the majority of cases, we deal directly with banks’ credit platforms,” explains Pascal Beuvelet, Founding President of In & Fi Crédits. However, they have much higher powers of engagement than branch offices, with whom individuals are in contact, whether on the amount of the loan to be released or on the level of the rate. “
The rate … and the rest
However, the broker’s bargaining power goes beyond the single rate, which Maël Bernier, Meilleurtaux.com spokesperson, points out is “part of a whole. When a client mandates us, it is a global financing solution that he comes to seek “. A turnkey installation playing on both the duration and type of loan, with formulas combining fixed rates and variable rates, for example. “We are also working in areas where individuals alone do not have much hold, complete Ari Bitton, CEO of AB Courtage.
This ranges from the reimbursement of processing fees, which we easily obtain in the context of national agreements, to the exemption of prepayment indemnities. Fixed at 3% of the outstanding capital, these are payable to the bank by the borrowers who do not reach the end of their credit. What is common: the average duration of a property is eight to eleven years.
Using the services of a broker also facilitates the negotiation of borrower insurance. Mandatory, it guarantees the repayment of the mortgage in case of death, disability, incapacity for work and possibly loss of employment. In 2010, the Lagarde law (1) opened the credit insurance market to competition, but not all banks are willing to play the game. “Insurance policies are very different from teaches the other, explains Maël Bernier. Some are open to the delegation, which they practiced even before the vote of the law; others remain reluctant to finance a borrower who will take out insurance outside their network. Credit brokers are, for the most part, also insurance brokers, they find individual solutions cheaper than those of bank group contracts, while providing the borrower with equivalent guarantees (a condition sine qua non of the delegation within the meaning of the Lagarde Act). With the recent entry into force of the Hamon law (2), they could face a dilemma.