One of the emerging fears of those whose financial status has been seriously impacted by lockdown, is having their home repossessed by the bond holder. This is a very serious concern and can be life-threatening in terms of elevating already high levels of stress and anxiety, more so for those who even before the onset of the coronavirus pandemic, were surviving on a month-to-month basis.
Absa wants to reassure its mortgage holders that repossession, or the sale of a property through execution, is absolutely a last resort for the bank, and only implemented after all, and there are numerous, solutions have been exhausted. “We work extensively with our customers in an attempt to resolve any financial distress they are facing,” says Mbuyiselo Khumalo, Head of Absa’s Home Loans Collections.
“Should a customer be faced with the unfortunate situation of not being able to meet their home loan payments for a couple of months, or worst case scenario, being unable to meet their home loan instalment commitments in totality, Absa has processes and tools available that can be engaged to assist them through this troubled time.”
Let us understand first, exactly what is meant by a repossessed property. House repossessions are related to personal debt, which when facing dire financial circumstances may mean a home owner defaults on the mortgage loan repayment. A bank or the credit financier on the home will thereafter attempt to sell the property to recover the balance due on the loan.
However, debt at this level does not happen overnight, which means there is time to put into play the various processes and tools that Absa can apply to assist in avoiding house repossession. “The sooner a customer advises us of their financial situation, the sooner we can look at the short- and long-term options we have in place,” says Mbuyiselo.
Assuming though that you have already engaged those interventions, such as payment arrangements, loan scenarios, re-bonding, accessing the capital, and you have reached the point where home ownership is no longer viable, Absa will introduce you to an assisted sales program. Along with partners like Private Property, Absa help a distressed home owner to sell the property at best possible market value.
“It is in both the home owner’s and Absa’s best interest that we do everything we can to sell the property before we reach the last mile; repossession,” confirms Mbuyiselo. “If none of the options applied have assisted the customer to retain or sell the property, only then do we follow the legislated foreclosure process to repossess a property.”
This is a regulated and legislated process, whereby Absa would need to approach the courts for consent to proceed with attachment and the sale of the property through a Sheriff’s auction. “The property is thereafter repossessed by the bank only if it is the highest bidder at the auction, and only then can be transferred into the name and ownership of Absa.”
This can be even more distressing for the home owner if they remain in occupancy during the auction, but not uncommon. “At the time the property is sold there is an expectation that the previous owner or tenant vacate the home, but if this should not be the case, the new purchaser will need to follow an eviction process. It is also not the bank’s responsibility to facilitate the customer finding a new property, however this is something we are reviewing currently as we extend Absa’s caring arm for its customers,” Mbuyiselo says.
All offers received are considered against the valuation of the property, be that by sale or by auction. The bank obviously wants to secure the highest possible selling price so that once the amount outstanding is settled, the owner can at least be paid the balance of profit. Repossessions may also be sold simply on the margin of settlement but Mbuyiselo explains that the reasons for doing so differs from case to case.
“There are many considerations that have to be determined for this to happen, such as the condition of the property, the period of time the property has been owned by the bank, the costs of rates and so on.”
When Absa repossesses a property it advertises it on its Absa Home Owner App that can be downloaded from the google play store, and on Private Property, where buyers can express their interest by completing a lead form. Buyers need not be cash purchasers either. “Absa can provide a bond or finance for repossessions. These property deals are no different from securing standard property finance,” says Mbuyiselo.
“Ultimately we are here to advise, and to assist customers to realise some profit if possible from an asset in which there has been investment over the years. Nobody wants to implement evictions and repossessions, it can be soul-destroying. Know that Absa will do everything possible to help you keep your home.”