Not raised pledges will be auctioned off in accordance with the regulations within 6 months. Through the low loan amounts, repayment of the Lombard loan including interest rates and fees is secured also in this way. The risk of fluctuations in the value of the pledged property limited due to the short maturity of credit, and if necessary, quick auction on only about 10 to 12 months. Also, the income situation of Lombardiums represents another safety aspect. On the basis of legal provisions and requirements, high revenue are generated in the industry of pawn shops and Lombard houses. Lombardium generated on the handed out mortgage loans 1% interest per month plus a handling and management fee of 2.5%-3.5%, also per month.
As a result an annual total return of at least 42%, based on the credit amount. With this total, it is possible to cover the annual costs of refinancing, whose main share the 7% represent interest for investors, without problems. The fact that it has never occurred that a member of the Association of German mortgage banking industry, which includes all reputable deposit and Lombard houses, has gone bankrupt, the rest speaks for the stability of the entire industry. To make the investor money to refinance the mortgage credit first, Lombardium must first of all many funds use criteria (E.g., lending limits, limits for Lombard credits, proof of ownership, etc.) meet. Only after proof of compliance with these criteria, the money paid by the subsidiary on a use-of-funds account is released. By processing all payments resources using account, one is subject to the allocation of investor funds to Lombardium current control, and this in short intervals. In the event of a sustained decline in the income from mortgage lending, the agents use controller has the ability to stop further payments to Lombardium and to make any premature repatriation of funds to investors.