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home­owner over an agreed pe­riod. This re­pay­ment plan is of­ten in­ter­est free and there are also dis­counts of up to 50% on the at­tor­ney trans­fer and reg­is­tra­tion costs for buy­ers that act as in­cen­tives to as­sist the sell­ers in mar­ket­ing their homes suc­cess­fully. What is hap­pen­ing in the dis­tressed prop­erty mar­ket? Over the past 18 months the num­ber of peo­ple in SA who are un­able to ser­vice their mort­gage pay­ments has in­creased dra­mat­i­cally. In fact, the Na­tional Credit Reg­u­la­tor’s first quar­ter re­port on con­sumer credit de­mand in­di­cated that as at the end of March this year credit bu­reaus had records for 18,21-mil­lion cred­i­tac­tive con­sumers.

It is in­ter­est­ing to note that of these only 54% were clas­si­fied as in good stand­ing. The num­ber of con­sumers with im­paired records con­tin­ued to in­crease, reach­ing 8,37-mil­lion, which in­di­cated a de­te­ri­o­ra­tion in the credit records of 191 000 con­sumers quar­ter-on­quar­ter and 915 000 year-on-year. Ad­verse list­ings and judg­ments con­trib­uted more in this cat­e­gory as com­pared to the cat­e­gory of three or more months in ar­rears.

More home­own­ers are fac­ing a sit­u­a­tion where the banks are look­ing to re­pos­sess their prop­er­ties. This could ul­ti­mately lead to the fam­ily los­ing their home as well a judge­ment be­ing taken against the home­owner. A credit judge­ment will re­sult in the home­owner re­ceiv­ing a bad credit rat­ing, which will pre­vent them from ob­tain­ing other sources of credit in the fu­ture. How­ever, these kinds of sit­u­a­tions can be averted if the home­owner seeks pro­fes­sional help from an ex­pe­ri­enced es­tate agent or le­gal ad­viser. Home­own­ers do have al­ter­na­tives if they are un­able to make their home loan pay­ments, but most peo­ple in this po­si­tion do not know what their op­tions are. What are the op­tions for those home­own­ers who find they are un­able to meet their mort­gage re­pay­ments? The pri­mary con­cern for us is to keep the home­own­ers in their prop­erty and to look for a way to ei­ther re­struc­ture their loan or to sell the prop­erty with min­i­mum im­pact on the owner’s cap­i­tal or credit record. Hap­pily, South African banks are co-op­er­at­ing, with most in­sti­tu­tions will­ing to find cre­ative ways to as­sist their

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