The Mortgage Crisis Hits France Front And Center: Are French Bank Nationalizations Imminent?
If you said some sovereign or corporate issue based out of Spain, Italy, Ireland, Portugal, or even Greece you would be close... but no cigar. No - the bond in question is an issue of Caisse Centrale du Credit Immobilier de France (3CIF), which together with its sister entity CIF Euromortgage (CIFE), is a 100% subsidiary of Credit Immobilier de France Development (CIFD), which as Fitch describes it, is a French "housing loans specialist, with business exclusively directed to France." CIFD is in turn owned by Procivis Group, which just happens to be France's second largest full-service real estate group.
In other words, CIFD, together with its subsidiaries 3CIF and CIFE represent a critical glance into the functioning (or lack thereof) of the French mortgage market. The various CIF mortgage entities are related as per the following Org Chart:
A brief summary on the Procivis Group, of which the CIF entities are a part of, via Fitch (bear with us - this is important):
Business: Mortgage financing in France continues to be predominantly distributed through the biggest retail and saving banks in the country. Specialist banks thus have a modest cumulative market share (10%-12%), but benefit from their wide range of products to maintain their franchise. CIFD offered 15 products at end-2011 and has developed some innovative services (eg, price insurance under which the difference between the sale price and the original price paid by the borrower, if negative, is covered up to EUR40,000 by the insurer). Its specialisation and its strong expertise in the French housing market represent key strengths compared with more global peers, as they enable the group to provide bespoke products to its customers. CIFD extends loans predominantly to private individuals, but also caters for investors' needs
Never mind, since austerity is not the solution, they just need to print, print and everything will be ok
"I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it."
George Bernard Shaw
“You can ignore reality, but you can't ignore the consequences of ignoring reality.” Ayn Rand