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Introduction of the PfandMeldeV - an overview

Christoph Kupfer

Christoph Kupfer


On October 07, 2022, BaFin published the Pfandbrief Amendment Ordinance. This also included the requirements for the new Pfandbrief Reporting Ordinance, PfandmeldeV for short.

The aim of the PfandMeldeV is to create a legal base for a Pfandbrief reporting system. The PfandMeldeV contains a 100-page annex describing in detail a report containing up to 24 spreadsheets, broken down by Pfandbrief type, and several thousand data fields. Institutions are only required to fill in sheets for the Pfandbrief class used. For example, a bank with a mortgage cover pool without derivatives but with foreign business must fill in up to 1,767 data fields, yet may leave the derivatives sheet for the mortgage cover pool or the sheets for the public cover pool blank.

The first reporting deadline was set at June 30, 2023, and so reporting banks and their IT service providers had just under nine months from conception, over implementation and testing, to delivery and installation with their clients. So, there was a lot on their plate and many questions arose.

To answer these questions, vdp invited to a first workshop with BaFin in January 2023, followed by a smaller second workshop in April for the IT service providers and those issuers who aggregate the report themselves. In the second workshop, open questions were asked and answers given as to what the status of implementation in individual institutions was.

Even though many of these questions could be answered with the involvement of BaFin, it also became apparent that reports could not be completed and submitted across the board by June 30 given lead time was too short in view of the complexity and volume of the data.

In terms of implementation, the issue of mixed-use properties, for example, still must be addressed from an IT perspective. In the §28 reports, mixed-use properties are currently classified according to their predominant type of use. In this regard, the bank decides in which main property group the property is classified. In the PfandMeldeV, mixed-use properties are to be grouped according to their gross income. Besides gross income, this requires additional object group classifications. This is because it is not just a question of mixtures of residential and commercial: mixed-use properties, such as properties in which, for example, a hotel and office space above it are rented out, must also be distinguished here.

The calculation of the excess amount of subordinated real estate liens is equally complex. This is intended to quantify the risk that senior real estate liens may also owe secured ancillary payments from the liquidation proceeds. In a kind of stress test, prior encumbrances are therefore to be increased by 30% in order to simulate an overshooting of the LTV limit. BaFin also specified how cover assets should be counted in the first workshop and illustrated this with a number of examples, so that follow-up work is also required here.
In addition to the pure implementation and total quality process at TXS, banks must also expand their data budget. For some aspects, all credit files have to be processed in order to provide the desired information. In some cases, these have to be entered as new data fields in the loan managing systems and the interface to TXS Pfandbrief has to be extended accordingly. This includes, for example, a marker for a simplified form of the determination of the mortgage lending value according to §24 BelWertV.

Some key figures may now also be so special that they may have to be entered directly in TXS Pfandbrief. For example, there are a number of new queries in the PfandMeldeV, such as whether a cover asset “was not extended by or for the bank”, is a “cover asset pursuant to §1 (2) PfandBG” or there are “other lenders in addition to the bank”. Here, a number of special cases with a view to the credit design of the institutions are considered, and multiple entries in rows are allowed. TXS was not able to derive these ratios from existing information, they have to be entered manually depending on the design of the loan agreements.
On June 13, 2023, BaFin informed the vdp and the DSGV that there would be no objections if the first report pursuant to the PfandMeldeV was submitted on June 30, 2024.

This acquiescence now forms the basis for the complete and correct implementation of the PfandMeldeV in those banks that are among TXS’s customers. The 12 months will by no means be comfortable stretch. We estimate four to six months for the implementation of the remaining requirements in standard software. The time it takes for users to update their software varies considerably, too, depending on whether they use their own IT or an IT provider. We estimate that this will require about another three to six months.
Nevertheless, TXS has been given different desired dates by customers for the initial notification. Most users, however, are actually leaning towards June 30, 2024. The reason for this indicated by all is the customary and tested supply chains between TXS and customers.