Better to keep people in their houses

"We recommend to battling customers either our special arrangement plan or our quick sell plan," the bank's home loans head of sales and marketing Sean O' Sullivan said at a presentation in Johannesburg.

With the special arrangement plan, the bank entered into an agreement with customers that payment would be reduced for 12 months.

"Once that term matures the outstanding balance is capitalised and we continue with the loan, this gives struggling customers a chance to get back on their feet," he said.

The plan also minimised the chance of legal action being taken against customers so they could still obtain credit in the future, but most importantly, they would keep their homes.

He said the bank had had to come up with "quick sale plan" for those that could not enter into the special arrangement plan. This involved the bank and the customer working together to sell the property by entering into a voluntary auction and not a forced sale.

Any shortfall was repayable over a period of up to 20 years at the prime lending rate. The customer remained in control of the sale of the property, meaning a minimum reserve price would be agreed upfront.

According to O'Sullivan, 100% bonds were offered to buyers at the auctions if they were able to qualify.

Source: Sapa

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