Nedbank launches client service for home loan defaulters
Options
- Paying back any missed payments over time
- Restructuring the loan over a longer period and paying back a smaller amount each month
- Selling their house on the open market using a process called Nedbank Assisted Sales
- Doing nothing and forcing the bank to pursue a foreclosure
The site also provides an indication of when each option is most suitable as well as an estimator that shows the impact on the client's finances of each option. This is customised to the client's situation, based on simple information provided by the client.
The site is written in a simple, engaging style and is designed to help clients educate themselves about the various options available and assist them in identifying the best solution for their specific circumstances. Once the client has an idea of how they would like to proceed, or if they require additional information, they can contact a fully trained debt specialist who is equipped to provide advice and support for the client's decision-making process.
Debi MiĊĦura, GM of Nedbank Home Loans Collections and Recoveries says, "We've developed a tool for clients to use to assess their own situation and make the best decision accordingly. By making the right choice now and sticking to that course of action, our clients are able to recover from difficult situations in the quickest possible time.
"Most clients that end up at a sheriff sale have either given up hope or have tried to delay selling their homes in the hope that their situation will suddenly improve. Many clients have incorrect information about what happens at a sheriff auction. Our experience has taught us that these clients end up losing the most money and our hope is that by providing information through this website, and building a team of specialists to provide support, those clients will make better decisions earlier on in the process."
Popular, successful options
The two most popular of the solutions are restructures and assisted sales.
Restructures are ideally suited for clients who still have regular income but are struggling to make ends meet. By allowing the loan to be repaid over a longer period, the monthly repayment is reduced. To date, the bank has helped more than 13 000 clients keep their homes this way.
The Nedbank Assisted Sales program (NAS) is suited for clients with severe affordability problems, typically due to a major decrease in income. The bank helps clients sell their property in the normal way, on the open market, making use of an approved estate agent. This gets a much better price than through a sheriff auction so both the client and the bank benefit. If the price achieved is below what the client owes the bank, and it often is, the bank offers appropriate terms to enable debt repayment, while keeping a clear credit record. The bank currently helps between 100 and 150 people sell their property this way each month.
NAS example
To illustrate the benefits of NAS, consider a client who owes the bank R500 000.
At a sheriff auction:
- The property will typically fetch a price between R250 000 and R300 000 (50% to 60% of value).
- After the auction, the client still owes Nedbank around R200 000.
- The client has a judgement recorded on his/her credit record, which can hamper financial recovery in future.
The same client who participates in an assisted sale:
- The property will probably get a price between R400 000 and R450 000 (80% to 90% of value).
- The client owes much less to the bank, somewhere in the region of R50 000.
- The client's credit record is either clear or can be improved rapidly
For more information, go to www.nedbank.co.za/HomeLoansHelp.
