Poor closer to securing home loans as property bill out for comment

Human Settlements Minister Lindiwe Sisulu moved her department closer to giving lower-income homeseekers access to finance when she published the Home Loan and Mortgage Disclosure Amendment Bill for public comment.

The bill aims to empower the Office of Disclosure which operates under the management of the director-general for human settlements. It will enable the office to investigate public complaints against financial institutions denying home loans. The bill will replace current laws put in place to stop banks from unfairly rejecting home loan applications.

The bill seeks to amend the Home Loan and Mortgage Disclosures Act of 2000.

The amendments have their beginnings in a memorandum of understanding signed between Sisulu and the banking sector, agreeing to open access to the home loan market to lower income brackets.

“A financial institution must, in respect of home loans and in the prescribed manner and form disclose … loan amount, rand value and number of all home loan applications received, scored, approved or declined during the reporting period … and reason for the decline, in the case of declined applications,” the bill said.

The amendment bill also places emphasis on identifying discriminatory lending patterns, which can be reported to the Office of Disclosure.

Human settlements spokesman Ndivhuwo Mabaya told Business Day that banks had also supported the Breaking New Ground policy and financed partially subsidised housing in areas in which government had invested, such as Cosmo City and the Oliven development in Centurion.

“The original act started the journey. The banks have responded, albeit cautiously,” said Mabaya.

The Banking Association of SA and the South African Banking Risk Information Centre said they would provide comment on the amendment bill once they had studied it in detail.