Estate Agencies across South Africa are reporting a significant rise in forced home sales. The current season of high interest rates has clearly placed many mortgage holders under pressure.
Banks are also reporting an increase in defaults on mortgage payments, but donâ€™t expect your bank manager to be knocking down your down with a foreclosure notice too soon.
In previous years Mortgage Providers in South Africa would aggressively foreclose thousands of homes if homeowners defaulted on their mortgage payments. It was not uncommon for the bank to repossess full streets of houses.
How times have changed.
Those mortgage providers quickly learnt that the impact of widespread and aggressive foreclosure had a huge social, administrative and financial cost to all.
We are now noticing that banks are more willing to assist mortgage holders to regain their financial footing, or sell their properties at market value before any legal action is even considered.
Alliance Group Chief Executive, Rael Levitt reports that banks are quietly helping their delinquent debtors keep away from foreclosure.
â€œCumbersome and costly court processes, legal bureaucracy and the fear of negative public perceptions are making banks simply look at other ways to resolve problems.â€
â€œWe are working closely with many banks to assist delinquent debtors in selling their homes through non-legal recourse. This seems to be the preferred way to goâ€, says Levitt.
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