Video transmission and the inclusion of real estate loans in cover

Most of the Covid-19-related measures (FAQ) taken by the Federal Financial Supervisory Authority (BaFin) expired on June 30, 2022. This also affects the rule allowing the inclusion of real estate loans in cover based on reports/valuations conducted without inspecting the interior and/or exterior of a property. Under this rule, it was possible to dispense with inspecting the interior and exterior under certain conditions. In particular, markdowns had to be applied to the mortgage lending value. These could be reduced when a property was inspected by video transmission, and dispensed with completely in the small loan sector.
In the opinion of BaFin, an inspection carried out by video transmission contradicts the currently valid version of the Mortgage Lending Value Regulation (BelWertV).

For this reason BaFin is, to our knowledge, sounding out possibilities to adjust this rule within the scope of work under way at present on amending the BelWertV.

Given the stringent contact and travel restrictions in force during the Covid-19 pandemic, it was no longer possible to conduct regular inspections in the customary manner as part of the property valuation process. However, the market quickly found an alternative in the form of video viewings. 

In order to conduct a video viewing, the customer (borrower) needs a smartphone or tablet with the camera, microphone and geolocation activated, as well as an internet connection.

Depending on the provider, an app has to be installed on the smartphone or tablet before beginning. Following specific instructions, experienced and qualified staff from specialised service providers commissioned by the financing bank actively guide the customer (borrower) through the property. The viewer creates the necessary photo documentation by taking screenshots of relevant features of the property during the viewing. All the relevant information on the property and its surroundings as well as on the scope of the viewing are clearly and comprehensibly recorded in a viewing report.

The vdp member banks rate video viewings favourably, expressing their satisfaction with the service in terms of quality, stability, functionality and data security. The Commerzbank describes its experiences with video viewings in an interview in the latest edition of the vdp’s QUARTERLY magazine.