Germany has set new regulations for residential mortgage book sales to third parties. The law referred to in German as "Risikobegrenzungsgesetz" is expected to lead to a longer workout process for German residential mortgage loans.

Agreed to on June 27 by the parliament (Bundestag) and passed on July 4 by the upper house (Bundesrat), the new law comprises a number of amendments designed to improve transparency in loan agreements and to address borrower fears of mistreatment by the mortgage book purchaser. In addition, it clarifies foreclosure practices for mortgage loans.

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