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