Managing your Bond Repayments
Covid-19 Repayment Assistance
At SA Home Loans we understand that some of our clients will face financial challenges from time to time, and we have always gone the extra mile to work with clients to find a way through these challenges. In the current uncertain environment brought on by the Covid-19 pandemic, while we always encourage our clients to continue to prioritise the payment of their home loan, we stand ready to work with clients whose incomes have been directly impacted by this virus to come up with personalised solutions to meet their cashflow challenges. If you have been affected and your account was previously up to date, and you need help to get through the next few months with a reduced instalment, please complete the form found on the link below and send to LossControl@sahomeloans.com with details of your situation and any supporting documents. We'll do our best to find a solution to help you.
Understand your Financial Health
There are a number of elements that influence your financial health. Understanding and proactively managing them will go a long way towards securing your financial future. The sections below provide a useful introduction to these important topics.
Sound financial management starts with gaining a good understanding of your household income and expenses.
Household income is the combined incomes of everyone sharing a household. In our experience this will most frequently mean a couple that are both “income contributors”. Household income includes every form of income such as salaries, wages, rental income, retirement income, investment gains, and child support, amongst others.
To understand your financial position it is important to differentiate between gross income, net income and net disposable income:
- Gross income is income before income tax and other deductions. For individuals, standard deductions usually include items such as provident fund, unemployment insurance and medical aid.
- Net income is income available after the above mentioned deductions have been taken into account.
- Net disposable income refers to the income which is left over after taking into account all your expenditures. A negative net disposable income means that your expenses exceed your available income. An increasingly precarious financial situation can be expected if this “deficit” is not brought under control and eliminated.
Household expenses refer to living expenses such as rentals, mortgage payments, utility bills, groceries, and others. These expenses can be categorised in various ways.
A good starting point is to consider whether expenses are either “fixed” or “variable” in nature. Fixed expenses are expenses that are generally the same each month, usually contractual in nature, cannot easily be changed, or is not depended on consumption habits. Mortgage, health insurance, life insurance, car insurance, home owners insurance and frequently education are examples of fixed expenses. Variable expenses represent those daily spending where the amount is not constant and does depend on consumption habits. Examples of variable expenses include groceries, fuel costs, utility bills and entertainment. Although many variable expenses are essential and unavoidable, individuals generally have more control over these types of expenses and have more flexibility to reduce them if the need arises.
Budgeting your expenses
A way to effectively manage your household’s income and expenses is to create an itemised budget. Although there are many approaches to creating a budget a good place to start is to keep a record of your income and expenditure over the last couple of months and then to calculate a reasonable monthly average. With this information at hand ask yourself whether your expenses are appropriate based on the income that you earn.
It is important to be realistic when this question is answered and to reassess spending habits if it appears that you are under financial strain.
One way to do this is to prioritise expenditure; focusing on ensuring that enough funds are available for contractual obligations (such as loans, insurance policies and retirement savings) and essential living expenses. Once these expenses have been prioritised it will be easier to reduce discretionary expenditure such as entertainment, mobile bills, and others.
Assets and Liabilities
Your net worth is calculated by subtracting the total value of your liabilities from the total value of your assets.
Assets may either be tangible or intangible in nature and liabilities are debts or committed payments that are due to third parties. For example, whilst your house is an asset, the mortgage loan on your home is a liability.
Assets can be classified in many ways, but here are some useful concepts.
Immovable assets refer to assets that are physically fixed and cannot be moved. This type of asset refers to land, buildings or any permanent structure. Conversely, moveable assets can be transported and includes items such as motor vehicles, appliances, clothes and furniture.
Another classification that can be considered is “liquid assets” which are assets that can readily be converted into cash. Examples of these types of assets include saving accounts and shares. Liquid assets are assets that cannot easily be converted into cash either because you are contractually unable to do so, or it may take a lengthy period of time to do so. The best example is the sale of a home; it could take many months before a buyer is secured, the transfer process is completed and the proceeds of the sale is received.
Similarly, liabilities can also be categorised in different ways. A liability is “secured” if it is backed by an asset. For example, a home loan is backed by a physical property. If the borrower fails to meet the repayment obligations the lender may, after following proper legal steps, sell the asset to recoup the outstanding debt.
Conversely, “unsecured” debt is not backed by an asset. Examples of unsecured lending include personal loans, overdraft and credit card facilities. Lenders may have a more difficult time recouping these debts and it is for this reason that unsecured debt is considered to be higher risk compared to secured lending.
The Importance of your Credit Score
A credit score in an indicator to lenders and other parties (for example, your employer) of a prospective client’s credit worthiness. In principle, the higher the credit score, the better the perceived credit risk and the more likely it is that lenders will extend credit to at favourable terms. Conversely, if a poor credit score is calculated, a credit application may be declined, or credit may be extended at higher interest rates and at less favourable terms and conditions.
Maintaining a good credit record may provide easier access to credit. Yet, it is important not to become financially overextended by accepting credit that is provided on generous terms. Financial commitments must be carefully planned. Current income and expenditure should be reviewed and then the decision should be taken about whether the credit offered is really required to meet a particular need.
“How-to” to maintain a good credit score:
- Bills should be paid on time, every time.
- Don’t be tempted by easy credit.
- If you are unable to meet your obligations it is important to contact your credit provides to discuss repayment options.
- It is also important to protect yourself against identity fraud. Criminals that have gained access to your personal information may use it to obtain credit fraudulently.
- Although credit scores change from time-to-time and may even improve with good financial conduct, certain types of information, such as default listings and judgments will remain on record for a period of time and may even limit access to new credit facilities.
You can contact a credit bureau to access your credit record, the information is usually provided at a minimum cost.
Protecting Yourself for Life's Eventualities
It is important to determine whether your have adequate insurance cover to address all of life”s eventualities.
For most people purchasing a home represents the single biggest investment that in all likelihood will be financed through a home loan. Although most homeowners would like to pay off their home loan in the shortest time possible, it is usually a number of years before this goal is in sight. Until then, unforeseen circumstances such as death, disability or retrenchment may severely limit your ability, or in the case of death your surviving spouse or family members ability to service home loan repayments. Without proper insurance protection, a real risk then exists that the home loan will go into default with little prospect of recovery.
We therefore strongly encourage our clients to have sufficient life cover in place to protect your family against these untimely events. To ensure that you select the cover that is right for you, financial planning advice should be sought from a FAIS accredited financial planner.
The SA Home Loans Bond Protector Plan is also available. Go here to find out more about this product offering.
Browse Information Topics
In addition to a good understanding of your financial health there are a number other factors, or life events, that may impact your future financial wellbeing. These topics are explored in detail below. If any are relevant to your current situation we encourage you to contact us so that we can discuss it in more detail.
The Risk Of Too Much Credit
Although many factors will influence your financial wellbeing, getting the basics right will go a long way towards planting a secure financial footing.
Unfortunately it is relatively easy to create unmanageable finances. This is especially true if you do not keep track of your income and spending habits or overextend yourself by incurring unaffordable levels of debt.
If you feel that you are losing control of your finances it is advisable that you contact your creditors to explore the feasibility of restructuring your debt repayments. The advantage of reaching agreement with your credit providers is that with lower instalments your expenses may be at a more sustainable level and you are more likely to repay your debt. But discipline is required; new debt must be avoided and you should carefully assess your budget to ensure that your expenses match available income.
If you are not in a position to make suitable repayment arrangements with your credit providers, you also have the option of approaching a Debt Counsellor for an over-indebtedness assessment.
If you feel that you need assistance with your home loan repayments please contact us on 086 111 3414.
Congratulations! The birth of a new baby is always a special time for your family. With the new baby come added responsibilities and expenses that will require careful financial planning. This planning however already starts with your maternity leave and important issues to consider at this time include:
- How long the maternity leave period will be.
- How much income you will receive during this time and if it will be sufficient to cover your living expenses.
- Whether you intend on returning to work.
Depending on the outcome of this assessment, you may need to approach your credit providers to discuss whether options are available to rearrange your payments during your maternity leave. A proactive approach will signal to your creditors that you actively take ownership of your financial situation, which in turn may give them confidence to enter into repayment arrangements with you.
If you anticipate that you will require assistance during your maternity leave please contact us on 086 111 3414.
Retirement is a significant milestone that should be a time when you enjoy the fruits of a productive life. Yet, for many people retirement can also mean financial uncertainty; frequently retirement income cannot keep up with the demands of a rising cost of living; financial obligations such as home loans, vehicle finance and other credit obligations may place further strain on an already stressed financial situation.
Irrespective of your current situation, it is strongly advised that you discuss your financial needs with a qualified financial planner.
If you are experiencing financial difficulty at this time and need to discuss your options with SA Home Loans, please contact us on 086 111 3414
Divorce is a stressful life experience. Yet, even at this challenging time the best outcome is when both parties can agree on a settlement agreement without the need for lengthy and expensive legal action. Not only is the process of getting divorced quicker and easier, it also allows each party to start the new phase of their lives sooner.
If both parties jointly entered into a home loan agreement with SA Home Loans, the settlement agreement and subsequent divorce order does not impact your financial obligations to us. SA Home Loans is not a party to the agreement and both parties will therefore remain jointly and severally liable for the outstanding balance.
In the event that the settlement agreement awards full ownership of the property to one party, effect must be given to that order by cancelling and registering a new bond. If this new mortgage loan application is with SA Home Loans, it will remain subject to our normal credit criteria.
To understand our requirements, or to give effect to the divorce order, please contact us on 086 111 3414.
To be retrenched from your work is a life changing event which requires that important financial decisions are made straight away. Foremost is the fact that a loss of income may make it difficult for you to maintain loan repayments or meet your other financial obligations. Retrenchment can therefore have serious long-term implications on your financial wellbeing. It is important then, at an early stage, to make a realistic assessment of your options. You should also approach your credit providers in a honest manner to discuss your current situation.
In order to make an informed decision, you should consider the following questions:
- Do you have retrenchment cover in place and how much income will it provide?
- What is the value of your retrenchment package? How soon will you receive the funds? Has your employer provided you with proof of my retrenchment?
- Will you be able to apply for UIF?
- What is the likelihood of you will find new employment in the near future?
At SA Home Loans we will carefully consider all the information that you provide to us with the aim of finding a workable solution that is in the best interest of all parties. Solutions may include payment plans, or assistance with the selling of your property if this is an option that you are considering. The assistance that we may provide is tailored to each client’s unique situation and will remain subject to our terms and conditions.
If you require more information regarding the options that are available to you, please contact us on 086 111 3414.
Few people are ever ready for this tragic event. Not only is it a emotional time but there are important financial matters that must also be dealt with. We believe that being informed about what must be done can help relieve some of the stress and uncertainty experienced during this difficult time.
Collection All Relevant Documentation
An important element of responsible financial planning is to ensure that documents that are important in the event of death are stored in a safe, known and readily accessible location. A list of such documents could include:
- Insurance policies
- Marriage Certificate
- Children Birth Certificates/ Identity Documents
- List of assets
- Tax Returns
- Partnership or any other business agreements, as applicable
- Bank Statements
- Current billing statements
- Furthermore, to start the process of winding up the estate a death certificate must be obtained.
More information About A Deceased Spouse
Reporting The Estate
In terms of the Administration of Deceased Estates Act 66 of 1965, the estate must to be formally reported to the Master of the High Court in order for it to be wound up.
After the estate has been reported, the Master appoints an Executor by issuing a Letter of Executorship (if the deceased’s assets have a gross value of more than R125, 000) or a Letter of Authority (if the deceased’s assets have a gross value of less than R125, 000). The role of the executor is to gather in the assets of the deceased in order to pay any taxes and other debts and liabilities left by the deceased. The balance of the estate will be distributed in accordance with the Will or in accordance with the provisions of the Act.
How The Estate Will Be Managed
The manner in which the estate will be administered will depend on whether the deceased had a valid Will in place:
- If there is Will the estate will be wound up in accordance with the terms of the Will.
- Alternatively, if there is no valid Will, the estate will be regarded as an Intestate Estate and will be wound up in accordance with the provisions of the Administration of Deceased Estates Act.
The Financial Position Of The Estate
“Benefits”” to the estate will strengthen its financial position which consequently will allow the estate to settle any outstanding claims that creditors may have. Examples include life insurance policies, credit life cover and pension or provident fund pay-outs.
The Benefit Of Life Cover
An important factor that influences the administration of a deceased estate is whether the home loan was secured with life cover or not.
If valid life cover is in place at the time of death, the proceeds of the policy may fully or partially settle the outstanding home loan balance. If no life cover is in place the balance on the bond as at date of death becomes due and payable. If the surviving spouse or remaining bond holders are unable to settle the full balance owing, one of the following three options will generally available:
- The surviving spouse or remaining bond holder/s makes an application to take over the bond;
- The surviving spouse or remaining bond holder/s may not qualify for a new bond and may require adding a surety to the application;
- If none of the above options are viable it may be necessary to sell the property. The proceeds from the sale will then be used to settle the balance of the bond outstanding.
Please see PRODUCTS for more information on the importance of life assurance to you and your family’s financial security.
SA Home Loans and Deceased Estates
At SA Home Loans we understand how difficult a time this is for the family and surviving bondholders. We encourage you to contact us on 086 111 3414 so that we can discuss the options that are available to you.
Insolvency refers to a status of diminished legal capacity imposed by the courts on persons, companies, close corporations or trusts that are unable to service their debt obligations and where total liabilities exceed total available assets.
The aim of insolvency process is mainly to protect the estate’s creditors. This is achieved by realizing all the assets of the insolvent estate and using the proceeds to contribute towards payment of all or part payment of all outstanding liabilities. From an SA Home Loans perspective the outcome of the insolvency process is that the property in question must be sold.
How is an Insolvency Application Brought?
Insolvency application can be brought about in a number of ways:
- Voluntary Surrender (Natural Persons/Trusts) - is brought about by a Debtor and the burden of proof lies on this party to show that liabilities exceed the assets.
- Compulsory Sequestration (Natural Persons/Trusts) - is brought about by a Creditor, who must show that they have a liquidated claim, that the debtor is insolvent (or committed an act of insolvency) and that an advantage exists to creditors to have the debtor’s estate sequestrated.
- Forced Liquidation (Companies and Close Corporations) - A forced liquidation occurs when a creditor or a member of the company brings an application to the High Court for the company to be liquidated.
- Liquidation by special resolution (Companies and Close Corporations) - The members of the company make a decision to liquidate the company by special resolution.
Final Order Is Granted
Once the final order is granted by the court the individual or trust is sequestrated and the company or close corporation is liquidated. If an individual has been sequestrated, a Trustee will be appointed to attend to the administration of the estate. Similarly, if a company or CC has been liquidated a Liquidator would be appointed.
More Information About Insolvency
The role of the Trustee or Liquidator is to assume the financial responsibilities of the insolvent party. This entails the following:
- To investigate and list all the movable and immovable assets of the insolvent estate;
- To determine the extent of the liabilities of the insolvent estate;
- To realise (sell) all the movable and immovable assets of the insolvent estate.
Obligations Of Bondholders In The Event Of Insolvency
In the event of insolvency, the obligations and responsibilities of bondholders and sureties are influenced by their legal relationship with the insolvent party:
Bondholders married in Community of Property
By virtue of the fact that the spouses are married in Community of Property both spouses will be declared insolvent and a Trustee will then deal with a joint insolvent estate.
Bondholders married in terms of an Ante Nuptial Contract
SA Home Loans will determine if there is a solvent bond holder associated with the bond. If so, then it is the responsibility of the solvent bond holder to ensure that the bond repayments remain up to date. If the bond is not up to date, SA Home Loans can proceed with legal action against the solvent bond holder to cure the default.
The consent of the solvent bondholder is required before the property can be sold privately as an asset in an insolvent estate. The solvent bondholder remains responsible for any outstanding liability after the property is sold.
A Company or CC Is Liquidated
With regards to a SA Home Loans mortgage bond, sureties will be held liable for any shortfall which is outstanding on the mortgage bond after the sale of the property. Furthermore, in the interim, whilst the liquidation process is underway, home loan repayments must still be met. If the bond falls into arrears, SA Home Loans can proceed with legal action against the sureties to cure the default.
Home Loan Instalments Paid Via Salary Deduction
If your loan was granted on the basis of “salary deduction”, the monthly home loan instalment will be paid by your employer directly to SA Home Loans via salary stop order. Once your bond is registered, you will need to ensure that the stop order is established. Failure to do so may result in your bond going into arrears, with negative consequences for your credit record.
The following step with guide you in implementing your salary stop order.
- On registration, SA Home Loans will provide you with a registration pack, including a Z299 form, which is required to establish the salary stop order. If you have provided SA Home Loans will an e-mail address this registration pack will be e-mailed to you directly after your bond has been registered.
- It is imperative that you contact your HR department, provide them with the Z299 form, and ensure that they establish the monthly salary stop order.
- SA Home Loans perform regular follow-ups after the bond registered and will request updates on the progress of establishing the salary stop order.
- It is important to note that quarterly rate reviews may result in a change to your instalment. When this happens, you will be required to amend your salary stop order accordingly. In the event of a rate increase failure to amend the salary stop order may result in your home loans going into arrears.
Value Of Maintaining Your Property
In addition to displaying a natural pride in your home, maintaining your property has clear economic benefits. Wear and tear is unavoidable and if left unattended minor hiccups can become large maintenance headaches. Investing small amounts on a regular basis in the upkeep of your home may be more cost effective than a large cash outlay on a maintenance emergency later.
A well maintained property is more marketable should you decide that it is time to sell. When you put your property on the market you are in competition with other sellers for the interest and cash of prospective buyers. Buying property is to some extent an emotional decision that can only be positively re-enforced with a well presented home. An attractive property also generates more interest, which translates into a greater demand and very likely a higher price when your home is ultimately sold.
When you are financially distressed it is not easy to balance a budget. Whilst it is possible to forgo luxuries, some necessities, such as groceries, education, medical aid and others must always be provided for. Even in these difficult times it would also make good financial sense to set some funds aside to maintain your property. In the event that you have to sell, a little maintenance along the way could mean a higher sales price that repays what you owe on the bond and possibly leaves you with a surplus. Such a timely cash infusion could just be what is needed to ensure that you and your family regain your financial footing.
What should you focus on? Smart prioritisation could really extend the value that you derive from each Rand spend on the upkeep of your property. Thus, chores around the house such as gardening, touch-up painting where it is needed, replacing cracked windows, fixing gutters and cleaning carpets, may not sound important; but these are the things that are impactful and will leave a good first impression with prospective buyers.
Where am I Now?
At SA Home Loans we understand that clients sometimes are in situations where they find it difficult to meet their financial obligations. This is a stressful period, but we also believe that successful rehabilitation requires a proactive commitment from clients. This commitment starts with understanding your current situation, your obligations to SA Home Loans and the options that may be available to you.
I Am About To Default
If you find yourself in a situation where you are unable to meet your next home loan instalment it is important that you contact SA Home Loans as soon as possible.
In our experience it is always better to have an open and honest discussion as early as possible; rather than at the point that your instalment repayment behaviour has deteriorated to such an extent that the home loan is in default and the options available to you is severely limited. Missed instalments also have a negative impact on your credit score which will likely limit the credit that will be available to you in the future.
At SA Home Loans we have formulated an approach that will help us to clearly understand why you are finding it difficult to maintain your home loan instalment. We believe in working in partnership with our clients to explore all options that may be available at this stage. We also believe that the information gathering will not only assist us, but will also provide you with a clearer understanding of you current financial situation. This in itself may provide you with the knowledge you need to manage your finances better.
If you are finding it difficult to pay you home loan instalment we urge you to speak to us by calling 086 111 3414.
I Have Missed A Payment
You may find yourself in a position where you are struggling to honour your financial obligations and you have now missed your home loan instalment.
If you are in this situation, please do not delay contacting SA Home Loans. If you adopt a proactive approach, you will avoid receiving collection calls from us, and it will also indicate to us that you take your personal financial situation seriously.
We understand that our clients do not willingly default on their commitment to us. We know that your home is your most important investment and provides security to you and your family. We also strongly believe that an honest and open discussion around the reasons for the missed instalment will go a long way towards finding a solution that is to your, and our, benefit.
In support of this belief, we have developed a structured information gathering process that will not only assist us in identifying possible solutions to recover the missed instalment; we also believe that it will provide you with a clearer understanding of your current financial situation and the likelihood that you will be able to meet your future commitments to us.
Should you have any questions, or require more information, we urge you to speak to us by calling 086 111 3414.
I Have Received A Section 129 Notice
If you are unable to meet your repayment obligations under the home loan agreement, and there is no suitable arrangement currently in place, we reserve our rights to commence legal action against you. A Section 129 notice is the start of this process.
What does receiving a Section 129 notice mean?
A Section 129 notice is formal notification in accordance with the National Credit Act No. 34 of 2005, in which SA Home Loans makes you aware of your rights under the Act. The purpose of the Section 129 notification is therefore to inform you of the following:
- Your right to approach a Debt Counsellor,
- Your right to refer the matter for Alternate Dispute Resolution (including mediation),
- Your right to lodge a dispute with the Ombudsman,
- Your right to seek to legal representation.
In terms of the notification you have 10 business days within which to take appropriate action and inform SA Home Loans with regards to that intent. It is important to note that should you fail to pay the full arrears or confirm an arrangement, within the time period specified, SA Home Loans may commence with foreclosure action against you.
If you have received a Section 129 Notice, and wish to discuss the options that available to you now we urge you to speak to us by calling 086 111 3414.
I Want To Make An Arrangement
At SA Home Loans we understand that your home is your most important investment. We also know that some of our clients, from time-to-time, experience financial difficulty. Such difficulties prevent clients from meeting their commitment to us, even if they have the best intentions to do so.
Our point of departure is always that you should as best as you can maintain your home loan instalments with us. Not only does this ensure that you maintain a healthy credit record, it also means that you repay your capital on time. In so doing you avoid the additional interest that accrues on the higher outstanding loan balance.
We believe that each client’s situation is different and that a “one-shoe-fits-all” approach will not necessarily result in the desired outcome. It is for this reason that each client is assessed individually before a decision is made about whether an arrangement is the appropriate solution for their needs.
If you wish to apply for an arrangement with SA Home Loans we urge you to speak to us by calling 086 111 3414
I Have An Arrangement In Place
If we have formalised an arrangement with you, it is vital that the terms and conditions of that arrangement is honoured. Failure to adhere to the agreed payment plan will result in a higher arrear balance on your loan which will negatively impact your credit profile. It is also possible that legal action will be initiated at this time.
Legal action is the least desired outcome both from our perspective and we are sure from that of our clients too. The best outcome is one in which the loan is fully rehabilitated and our clients can recommence with paying regular home loan instalments. Therefore, we encourage you to contact us as soon as you realise that you cannot meet your obligations under the arrangement.
Should you wish to withdraw from the arrangement and rather opt to settle the full arrears outstanding, please make payment and contact us on 086 111 3414 to cancel the arrangement.
I Have Defaulted And I Am Now In Foreclosure
Although we will make best efforts to assist you in rehabilitating your home loan there may come a time that we need to initiate foreclosure proceedings to recover the outstanding liability due to us.
In the event that the foreclosure process has commenced a number of steps will follow:
Letter of demand/written demand
A letter of demand serves to inform the debtor and / or surety of an amount that is being claimed within a stipulated period.
In the pleading stage a summons setting out the Plaintiff’s (i.e. SA Home Loan’s) details of the claim is served on the Defendant (the bondholder that has defaulted). Once a summons is served on a Defendant they have 10 Court days in which to defend the action. Court days are all calendar days excluding weekends and public holidays. If the Defendant does not defend the action the Plaintiff is entitled to request default judgment.
It is a judgment in favour of a Plaintiff when the Defendant has not responded to a summons or has failed to appear before a court of law.
More Information About Default Judgment and Writ (Warrant of Execution Against Property)
A default judgment will severely injure your financial future and should be avoided at all costs. Some of the consequences of a default judgment are:
- A judgment will negatively impact your credit score.
- A judgment is valid for up to 30 years and can stay on your credit record for 5 years (but only if debt obligations are settled)
If the debtor does not honour a Court judgment the creditor may issue a warrant / writ of execution in terms whereof the Sheriff of the Court may attach and sell so much of the debtor’s property necessary to satisfy the judgment.
Sale In Execution
A sale in execution is a public auction of a bonded property by the Sheriff of the Court. A sale in execution is usually the last step that is taken when clients are unable to service home loan repayments; the home loan is in arrears, and all other efforts at rehabilitating the loan has failed. Properties sold in this manner must be advertised in the Government Gazette and two local newspapers.
If the property is sold at auction the bondholder will remain liable for the payment of any shortfall and legal costs, including the costs to sell the property at the sale in execution – this shortfall is the difference between what the property is sold for and what is owed on the bond plus interest and costs incurred.
Alternatives To Foreclosure
As emphasised throughout, we strongly advise our clients to proactively manage their finances and in particular their home loan instalment commitments. Legal action is always the last resort, and is costly both for SA Home Loans and our clients. In addition to the arrangement options discussed previously, we provide two further services to our financially distressed clients.
“Sell Assist” – Is a programme that allows SA Home Loans to market and sell the property on our clients’ behalf.
The process begins with the signing of a sole mandate by you. This mandate allows SA Home Loans to instruct reputable estate agents to market the property exclusively. You are advised of the progress at every step and if an offer is received that is to you and SA Home Loans satisfaction, you will be required to sign the Offer to Purchase; the normal transfer procedure then follows.
Special Power Of Attorney – A special power of attorney (or SPOA) is an agreement between SA Home Loans and you wherein we have been given the authority to market and sell the property. Unlike “Sell Assist”, in an SPOA, SA Home Loans has the right to consider and accept offers of behalf of the client.
As such, the Agent will liaise with SA Home Loans regarding the offer, and if acceptable SA Home Loans will sign the offer to purchase. Thereafter the normal transfer process will commence.
Clients that opt for these options enjoy a further benefit of reduced conveyancing fees if one of our panel attorneys is utilised for the transfer.
My Property Is Sold And There Is A Shortfall
If it was not possible to rehabilitate the loan, the final outcome may be that the property is sold at a sheriff’s auction, or sold privately or repossessed by SA Home Loans. A shortfall will arise if the proceeds of the sale are not sufficient to fully repay the outstanding balance on the home loan. At this point SA Home Loans can still institute legal action to recover on the shortfall if there is no suitable repayment arrangement in place.
I Am In Debt Counselling
Debt counselling is a process established by the National Credit Regulator (NCR) that consumers can avail them to if they are no longer able to manage their debt obligations.
The credit records of consumers that apply for debt review are updated to reflect this status and while it remains active access to further credit will not be possible.
The debt review process starts with a debt counsellor assessing whether you are over indebted. If you are found to be over indebted, the debt counsellor will propose a restructuring of your debt and will submit the proposal to your creditors. However, all judgments that are in existence at the time of applying for debt counselling are excluded from the debt review process.
Although debt counselling can help you regain control over your financial situation, it should be considered as a short-term option. As soon your financial health has improved you may wish to consider whether it is an appropriate time to exist the debt review process.