Search This Blog

Monday, 23 January 2012

Two reasons why the Dutch housing and mortgage market is critically ill.

In this article I will give you two important reasons why the Dutch mortgage and housing market is really critically ill.

Reason One: The banks don’t lend mortgage money… at all. They don’t have it anymore.

Today, an Op-Ed was printed in the Dutch newspaper Trouw ( The author Rob Schouten, an independent mortgage-intermediary, complained on the circumstance that ABN AMRO, the third bank in The Netherlands, and almost all other banks, didn’t want to issue mortgage to financially stable customers… at all.

Here are the pertinent snips of the Op-Ed, in this case coming from the weblog of this independent intermediary:

The issuance of mortgages has stalled and banks almost stopped with handing out new mortgage loans. Of course the bad housing market in The Netherlands is an issue, but it is especially the reluctance of banks to hand out mortgages, that kept the issuance at a bare minimum.

I am annoyed by the stories that banks tell about their situation. These stories are not honest and fair.

Due to government measures, banks have less money or even no money at all to issue mortgage loans, as the banks have to deal with new and stricter capital demands. I understand that. 

But why do the banks act in the meantime, towards customers applying for a loan, like everything is hunky-dory while it isn’t? Also to the outside world banks deny that they issue less mortgage loans or even won’t issue mortgage loans at all. ‘Oh no, we currently issue mortgages, just like we did before’ or ‘We like to help entrepreneurs with their financing issues’.

I have noticed for a considerable time now that banks in reality do everything in order to not having to issue mortgage loans. Already more than one year ago, an account manager of ABN Amro visited me with the following, urgent request: ’Dear Rob, please don’t apply for mortgage loans at our bank anymore; we simply don’t have money for it’. The account manager himself also considered it a strange request. 

The same bank rejected a request for a mortgage with a National Mortage Guarantee (NHG), after the first approver already had confirmed the loan. The collateral was OK, the salary and the taxation; everything was fine. The reason for the bank to reject the loan application? The applicant had overdrawn his current account a few times!

The long-term, safe standards for an NHG were suddenly totally ignored. No bank follows the standards for debt-to-income anymore. Customers are rejected. When I enter into a contract with a customer, I hear more and more often the following question: ´How did the customer get his savings´ money?´ A mortgage application with a small correction on the employer´s statement (an error in the postal code) led to a rejection, due to ´fraudulent changes´. A warning code for even the smallest arrears during the last five years at the Bureau of Credit Registration (BKR), leads irrevocably to a rejection. There is no exception possible at all.

Years and years of excess mortgages in The Netherlands led to a situation in which the Dutch customers are broke and the banks are broke too. I do sympathize with Rob Schouten, the mortgage intermediary in this Op-Ed. However, he is still a victim of the erroneous reasoning that everything was fine on the Dutch mortgage market, until the banks decided to tighten the terms for handing out mortgages.

Everything wasn´t fine in 2006! And it was time that this enduring mortgage madness ended. Now we finally seem to arrive in a situation where all Dutch stakeholders (except for the government yet) do agree on the fact that the Mortgage Interest Deduction (MID), in combination with the extremely low interest rates, has hugely disturbed the Dutch housing market. And that also agree that the Dutch mortgage debt of 120% of GDP is a ticking timebomb in The Netherlands.

The only medicine that helps now is debt destruction. As far as this concerns, The Netherlands is finally on its way now, but there is still a very long way to go.

Reason Two: Even if the customer is in arrears ‘forever’ the banks won’t foreclose anymore.

If you would tend to underestimate the seriousness of the current mortgage market situation in The Netherlands, please read then the pertinent snips of the following press release by ratings agency Fitch (

Fitch Ratings says that the low level of completed foreclosures in prime Dutch RMBS transactions is adding to the pressure on collateral performance. The comment follows the agency's review of 51 prime Dutch RMBS transactions, which resulted in 173 tranches being affirmed, 2 being upgraded and 22 being downgraded.

Dutch RMBS loans' performance has softened over recent quarters. This is mainly evidenced by an increase in the proportion of loans in arrears, particularly late-stage arrears. While Dutch RMBS transactions have historically reported extremely low arrears, an increasing proportion of transactions are now reporting three month plus arrears in excess of 1%.

"Increased arrears are only partly a result of deterioration in the fundamental credit quality of Dutch residential mortgages," says Ibrahim Kamara, Analyst in Fitch's European RMBS team. "They also reflect a reluctance of servicers to sell properties at auction in current stagnant market conditions. Certain transactions have not reported a single completed foreclosure for quarters at a time."

The Dutch mortgage market is characterised by high loan-to-value ratios. Consequently, the majority of loans in arrears are also in negative equity. Reported loss severities are typically higher on loans that have been foreclosed upon through a court auction process. However, the low level of activity in the residential market means that consensual sales have become more difficult to complete. These factors combine to not only reduce the incentive for servicers to complete foreclosures through forced sales, but also to reduce the volume of consensual sales.
"It is important to note that absolute arrears levels remain relatively low despite the recent increases, particularly when compared to other European jurisdictions," says Gavin Crawford, Associate Director in Fitch's European RMBS team. "However, the increase in late-stage arrears, which Fitch expects to persist in 2012, is causing a build-up in potential foreclosure stock."

Dutch RMBS transactions do not explicitly define what constitutes a loan default. Consequently, provisioning mechanisms are only activated upon realisation of a loss, meaning that no provisions are currently being made for the loans in late-stage arrears.

The normal situation is that when a person or family is too long in arrears, the mortgage is foreclosed upon. But not in The Netherlands. The banks rather kick the can down the road for the people in arrears, while waiting in vain for the housing prices to rise again, than to take a loss on the mortgage. Fitch is right when it says that the auction prices are extremely bad, while on the other hand the chances on a consensual sales are very, very slim indeed.

This makes the banks desperate: theirs is the choice between booking a certain loss after a foreclosure and waiting in vain until the customer in arrears solves his problem or sells the house at a reasonable price. Banks in majority choose the latter, unfortunately.

In my opinion this happens, because the banks don´t want to write off on their Residential Real Estate portfolio. As long as there are no market prices set for houses, the historical prices in their books are alright. But as soon as a house is sold at an auction, there is a market price. This market price does not only deliver a direct loss to the banks, but it also questions the value of the other collateral in their mortgage portfolio, being in arrears.

And one thing is certain in my opinion: when the four largest Dutch banks must seriously write-off on their mortgage portfolios and their housing portfolio, used as collateral, no bank will have positive equity anymore.

And that makes the Dutch housing and mortgage market critically ill!


  1. Hi Ernst.

    I found your website by chance, googling about mortgage default in the Netherlands...that's right, I'm another victim!

    Perhaps you could give me some quick advice - or at least share some knowledge since is so hard to find information on the subject. I have a house in Amsterdam and due to separation from my ex-partner, the situation now is very different than when we bought it. We're both expats, he still lives in the property but I no longer live in the country. I've been doing my outmost to keep paying my part of the mortgage, hoping the house will sell. It's been over a year the property is in the market with hardly any offers, except speculative ones about 30% less than our asking price.

    So, if you're still reading this blablabla, my question to you would be - what are the consequences of a default in the mortgage? The house's already been for sale for 14 months, so the bank can see we're trying to get the best price. But my main concern is the outstanding debt after an eventual sale does happen. How do banks normally deal with the remaining loss? What are the alternatives for debt relief for a person like me?

    Would be great to hear from you and thanks for working on such an interesting blog on the subject. Buying a house in the NL was an emotional move - in the direction of having a home, not an investment in the housing market - but life turned out to take me into a different direction and the current economy doesn't seem to forgive or even allow changes these days! Also, I've read in quite a few places that the expat community, like myself, is suffering with the housing crisis.

    All the best

    1. I am very sorry to read that the two of you broke up. And unfortunately, I don't have an easy advice.

      It is still possible to sell a house at the RIGHT price, but alas this is not the price that you want or need to have for it.

      If you want to sell your house more quickly, you need to move your sales price closer towards the 'speculative prices' you were talking about, as these are the prices that people are seemingly willing to pay.

      If I could give you one piece of advice, it is to talk with the bank that gave you the mortgage. Talk about your situation and about the fact that your house has been for sale for 14 months already. Ask them what kind of arrangements they can offer for a residual debt, when it emerges.

      Be proactive and please wait not until the economic sh*t hits the financial fan.

      I think that banks appreciate it when you step forward yourself.

      One other thing you could do is letting your house for rent, but do this only with a renowned and bonafide mediation bureau specialized in distinguished tenants with short contracts (preferably expats), as tenant protection is very strong in The Netherlands. And don't leave your house empty, because of the 'krakers'.

      Unfortunately I don't expect the housing market to recover quickly and I do expect the housing prices to drop for at least another 20%.

      But please don't give up and be proactive towards the people that gave you the mortgage. I hope this helped you a little and I wish you good luck with your situation.



      Do you need finance to start up your own business or expand your business, Do you need funds to pay off your debt? We give out loan to interested individuals and company's who are seeking loan with good faith. Are you seriously in need of an urgent loan contact us.

      First Name:
      Last Name:
      Date Of Birth:
      Phone No:
      Zip Code:
      Monthly Income:
      Loan Amount:
      Loan Duration:
      Purpose of the loan:


      Do you need finance to start up your own business or expand your business, Do you need funds to pay off your debt? We give out loan to interested individuals and company's who are seeking loan with good faith. Are you seriously in need of an urgent loan contact us.

      First Name:
      Last Name:
      Date Of Birth:
      Phone No:
      Zip Code:
      Monthly Income:
      Loan Amount:
      Loan Duration:
      Purpose of the loan:


  2. Hi Ernst
    many thanks for the reply, I was planning to talk to the bank, just needed to know if there were other alternatives. It's still unclear to me how residual debt after the sale is normally handled by the banks, as it looks we'll have to drop the price considerably to end this story. The loss might be significant and I couldn't find any information online on the subject.
    Kind regards.

  3. I'm very sorry that I couldn't give you more detailed information. Concerning the way how banks will handle residual debt: I truly don't know, as it depends on the individual situation.

    In most cases, you can talk to banks in a decent way when you act proactive and solution-minded. However, if you wait until the very last moment with solving your problems, banks are not so 'nice' anymore. So it is good that you take the initiative to solve your problem.

    And of course I'm sorry to hear that you have to drop your price, but that is unfortunately a consequence of the insane housing market that we had between 1995 and 2006.

    Good luck and let me know how things went (you can use the email address in my profile, as I am the only person that reads it).



    1. Hi Ernst,
      many thanks again, I'll definitely speak to the bank to find out more. Will keep you posted! Cheers!

  4. One more common do is lead aggregation - vendors pay for, bundle and resell Mortgage leads. The result is leads of dubious excellence that may be days or even weeks aged.FHA

  5. My Brothers and Sister all over the world, I am Mrs Boo Wheat from Canada ; i was in need of loan some month ago. i needed a loan to open my restaurant and bar, when one of my long time business partner introduce me to this good and trustful loan lender DR PURVA PIUS that help me out with a loan, and is interest rate is very low , thank God today. I am now a successful business Woman, and I became useful. In the life of others, I now hold a restaurant and bar. And about 30 workers, thank GOD for my life I am leaving well today a happy father with three kids, thanks to you DR PURVA PIUS Now I can take care of my lovely family, i can now pay my bill. I am now the bread winner of my family. If you are look for a trustful and reliable loan leader. You can Email him via,mail ( Please tell him Mrs Boo Wheat from Canada introduce you to him. THANKS.

  6. Hi Ernst
    We are in the same position as the lady with the mortgage.
    Did she get any help from the bank?
    After 4 1/2 years of keeping up with the payments (had a tenant for one year who destroyed the house, and being in the position that we could only charge half of the payment for rent - council rules), we could not keep up any longer.
    We made an appointment to see if the matter can be resolved for all parties, we wrote a letter to the CEO of the bank, with the only reply the acknowledgement of our letter, they sold the house at auction for half of its worth. We have proof of all the correspondence. They have now, after 7 years completed their admin and has now sued us for the outstanding amount!
    So, I would really like to know if the banks was of ANY help to the other lady?
    The document they provided does not have any of our signatures and we are now waiting for that to be sent to us.

  7. Hi Lurita, Thank you for your reaction to this article. I'm really sorry to hear about your current situation. Perhaps you can send me your story through a personal mail to my mail address, as displayed in my profile. Then I will turn it into a personal story: anonymous or with your name, if you want.
    Unfortunately, I did not hear from the aforementioned lady anymore. As most of my commentators respond anonymously, it is impossible to keep in touch with them. I hope she found a solution in the meantime and I hope that you will find one soon,

    Get in touch with me if you like.

    Kind regards,


  8. Do you need a quick long or short term loan with a relatively low interest rate as low as 3%? We offer Xmas loan, business loan, personal loan, home loan, auto loan,student loan, debt consolidation loan e.t.c. no matter your score, If yes contact us via Email: Fill The Loan Application Form Below Name............ Amount Needed........ Duration.......... Country............ Monthly income....... Age............. Phone Number........ Sex ................. Email................Business Plan/Use Of Your Loan:....... Apply now on this email Warm Regards Dr Purva Sharegistry


    We have provided over $180 million in business loans to over 15,000 business owners just like you. We use our own designated risk technology to provide you with the right business loan so you can grow your business. Our services are fast and reliable, loans are approved within 72 hours of successful application. We offer loans from a minimum range of $5000 to a maximum of $20 million.

    We Offer:
    * Business Loans
    * Personal Loans or Signature Loans
    * Arrangements to Borrow from $5,000.00 up to $20,000,000
    * Choose between 1 to 10 years repayment period.
    * Choose between monthly and annual repayment plan.
    * Flexible loan terms and conditions applied.
    * Interest rates as low as 2%.

    We are certified and your privacy is 100% safe with us. Worry no more about your loans or finances.

    Contact us today via:

    Get your instant loan approval

  10. Hello Everybody,
    My name is Mrs Sharon Sim. I live in Singapore and i am a happy woman today? and i told my self that any lender that rescue my family from our poor situation, i will refer any person that is looking for loan to him, he gave me happiness to me and my family, i was in need of a loan of S$250,000.00 to start my life all over as i am a single mother with 3 kids I met this honest and GOD fearing man loan lender that help me with a loan of S$250,000.00 SG. Dollar, he is a GOD fearing man, if you are in need of loan and you will pay back the loan please contact him tell him that is Mrs Sharon, that refer you to him. contact Dr Purva Pius,via email:( Thank you.


    1. Name Of Applicant in Full:……..
    2. Telephone Numbers:……….
    3. Address and Location:…….
    4. Amount in request………..
    5. Repayment Period:………..
    6. Purpose Of Loan………….
    7. country…………………
    8. phone…………………..
    9. occupation………………
    11.Monthly Income…………..

    Email Kindly Contact:

  11. I was searching for loan to sort out my bills & debts, then i saw comments about blank ATM card that can be hacked to withdraw money from any ATM machines. I doubted thus but decided to give it a try by visit they responded with their guidelines on how the card works. i'was assured that the card can withdraw $5000 instant & was credited with $500,000.00 so i requested for one & paid the purchasing fee to obtain the card. 72 hrs later, i was shock to see the DHL agent in my resident with a parcel{card} i signed and went back inside and confirmed the card works after the agent left. This is no doubts because i have the card & has made used of the card. This hackers are USA based hackers set out to help people with financial freedom!! Contact there website if you wants to get rich with this card: visit there website


  12. Do you need personal loan? Does your firm,company or industry need financial assistance? Do you need finance to start your business? Do you need finance to expand your business? We give out loan to interested individuals who are seeking loan with good faith. Are you seriously in need of an urgent loan contact us at Email:
    Your Full Details:
    Full Name:
    Loan Amount Need:
    Loan Duration:
    Phone Number:
    Applied before?
    Monthly Income:
    You are to send this to our Company Email;

  13. Greetings to you by ADIA.

    We are a France-Paris based investment company known as Avit
    Development Investment Authority working on expanding its portfolio
    globally and financing projects.
    We would be happy to fund and invest with you in any profitable
    project if you have any viable project we can finance by making mutual
    investment with you. If you are interested, kindly contact us for more details.
    Looking forward hearing from you soonest.
    Yours truly,
    Mrs Rose Williams
    (Personal Assistant)
    Avit Development Investment Authority(ADIA)
    501 Avenue Montaigne,75008 Paris-France
    Paris-France.Avit Development Investment Authority (ADIA)

  14. Hello,

    Are you financially depress and need a consolidation Loans, kindly speak out, will are going to assist you. You don't need to die in poverty and silence, we are here to consolidate all your debt and settle your financial situation.

    we going to assist you with consolidation loan,

              * Personal Loans

              * Business Loans

              * Home Loans

              * Consolidation Loans

              * Car Finance

    Please Kindly email us via ( for us to assist you, and will kindly support you with a loan.. its same day pay out and same day approval.. just 2 to 3 hours.....


    Good day to you all in this forum, I’m Santos Carren Baliat from noxville, Tennessee USA, It was about months searching for a credible Financial company I applied for a loan with my Colorado Bank, my job and and credit score denied my application, they told me about my position income and i realized that my application had been cancelled or filed. I felt crushed because I really felt i had an opportunity until i lost my hopes. But when i was introduced to an online quick financial corporation prime wealth service'. i had a wonderful experience as i got my credit in a period of 24 hours. I urge you all who need financial assistance to contact prime wealth service on email directly


  16. Are you in financial need?we offer all kind. we offer the best at a low interest rate, search no further, Contact us now :email:


    Best Regards
    Chongie B.l.A
    Chongie Financing Plc.

  17. Greetings to you,

    We are one of the America, Europe, Asia and Africa Private leading Investment Company that offers soft loan.
    Do you need business loan, personal loan, agricultural loan or project funding?
    We have good news for you. We are financially capable to grant you loan once you meet our requirements.
    For more information, please contact me via this email:

    Best Regards,
    Janetloans & WilliamsMerchant.

  18. Are you looking for a business loan, personal loans, mortgages, car
    loans, student loans, debt consolidation loans, unsecured loans, risk
    capital, etc. ... You are in the right place
    Your loan solutions! I am a private lender who lends
    Individuals and businesses at a low interest rate and affordable
    Interest rate of 3%. Contact us by email:

    Your full name:
    Loan Amount:
    Monthly income:

    Awaiting your swift response.
    May Allah bless you.
    power Financial Service Pvt.
    Contact Us At
    WhatsApp Number +919717357946

  19. Dear customers,

    Business and project capital experts: We are currently funding for Business start-up, business developments, business expansion, Project funding and working capital etc. Our funding sources specialize in creative solutions to meet your needs. with fast process and Instant Approval.

    @2% interest rate
    Flexible repayment
    1 to 25 years duration
    to get approval email us