It’s the end of an obstacle course. Since September 1, people who take out a mortgage loan have the opportunity to change the loan insurance agreement, the famous death and disability guarantee, at any time. Therefore, abandon the (very complex) calendar in force until then. Competition between contracts is thus greatly facilitated, and your bank will not be able to reject your new contract if it is at least as protective as the old one. For most households, several thousand euros can thus be saved over the total term of the loan.

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Already on paper, these advances are significant, to ease the administrative life of borrowers, subject to all kinds of delaying maneuvers on the part of the banks. Condemned by the banking police – the Prudential Control and Resolution Authority (ACPR) – these obstacles have been largely removed by legislation introduced by Deputy Patricia Lemoine. The broker Securimut, a subsidiary of Macif, has identified five. Here they are.

The untraceable termination address

Finding the right interlocutor can already become a headache for the borrower. For this, he must contact the department in his bank responsible for cancellations, whose address is formally stated on the first page of the loan offer. Except that the most obvious answer is not necessarily the right one. When he receives the mail, the bank may then ask him to send the mail to its branch or another service. In the first case, the address is easy to find. In the second, however, the approach is less obvious. “It sometimes even happens that requests have to be sent to another type of more unusual entity (back office, ongoing account management center, etc.) without this falling under any known external rule”, warns Sécurimut.

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The loss of time is considerable for the borrower, as he has to indulge in a treasure hunt. At best his bank tells him the correct address, at worst he gets no answer and has to fend for himself. And again, some companies have fun regularly changing the address of the service responsible for terminations. “These questions have no longer existed in the various insurance markets for a long time, and it goes without saying that any unit that receives a request from a customer can now scan and address this request to any specialized service in its unit”, recalls the broker.

The Lemoine law could partially remedy this difficulty, as it introduces an annual information obligation for insurance companies in a durable medium: post, e-mail or personal space. The client must be kept informed of his right of termination and of course the terms and conditions for playing it. The address is logically part of it.

Reply too late…

On paper, the law has been clear since 2013. Banks have a legal deadline of 10 working days, from the receipt of your compensation request, to respond to your request. In reality, the answers very often exceed this limit. Securimut data shows that more than a third of banks still exceed a 15-day deadline in 2021, 15% even wait more than 30 days to honor you to keep you informed of their decision. However, one figure has fallen sharply compared to 2019 and 2020, mainly due to Crédit Mutuel’s compliance.

However, it testifies to a continuing practice outside the law of many other establishments. As proof, a third of the requests must be relaunched – in the absence of a response within 20 days – and half must be repeated several times. “Such a multiplication of letters is symptomatic of banks’ reluctance to give up their own borrower insurance,” Securimut said.

If nothing is expressly specified by the Lemoine Act, termination at any time allows borrowers to no longer face banks playing for time. Because before the reform, if a borrower missed the annual notice window, he was on board for 12 more months. This is no longer the case.

… and incomplete

When they neglect to respond, the banks can still pull the files. All they have to do is not send all the necessary information. Even experienced brokers find it very difficult to gather all the necessary elements. Furthermore, only 40% of loaner insurance change requests receive a single, complete response from the bank. And getting an insurance substitution requires at least four exchanges with the bank. Remember that a complete response must include validation of the equivalence of guarantees, a termination date and a description of the new loan. A simple trick to retain the client or more simply turn him into a counter proposal.

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The problem was clearly identified by the deputies, so Article 2 of the law now requires the bank to give an “explicit” answer with “all the reasons for the refusal”. So that in the event of non-equivalence of the coverage, the loan institution must specify which guarantee must be adjusted up. If the chosen termination date is not required by law, the bank must also state why. “The unique response rate should therefore increase significantly in the coming months for all compensation requests,” according to Securimut.

Double insurance charge

This is a very important document when you need to change your loan insurance. The bank’s agreement must be accompanied by a change to the loan offer with your new contract. This includes the termination date as well as the cost of your indemnity insurance. Except that the legal deadline for issuing this document – 10 working days – is rarely met.

However, if it is not sent early enough, the effective date of the contract will be moved and two policies may then overlap. Result: the borrower is covered by two insurance policies. On the one hand, the bank that has accepted the replacement of the insurance, but which maintains its contract, and on the other side of the contract for the new company that started the coverage. Paying twice for the same coverage: the approach is enough to annoy more than one.

That’s why what was just a recommendation from the banking police has become a legal obligation thanks to the Lemoine unit. The lender officially has 10 working days to issue the endorsement.

Changes in monthly payments

Unbelievable, but true. Some banks are taking advantage of the change in borrower insurance to change the mortgage amortization schedule. Securimut cites the example of the Banque Populaire and Caisse d’Epargne networks. The bank converts its loan (excluding insurance) with progressive monthly payments into a loan with fixed monthly payments. The borrower thus pays more monthly payments in the first years. A priori not a problem if the amount to be repaid is the same during the total term of the loan, you would say. The problem is that a loan is held for 8 years on average by a household. He therefore has no interest in overpaying his monthly payments at the start of the loan.

Through the new law, consumer legislation now clarifies that the bank can no longer change the conditions for granting credit, including the installment method.