Banks reach out to struggling homeowners

Xolile Bhengu

Xolile Bhengu

In a bid to curb the rising number of home repossessions, the big four banks are extending a helping hand to customers struggling to make their bond repayments.

Absa Bank has opened a debt distress line for its customers where they get advice from agents on possible solutions to retaining their homes.

Absa group executive for Secured Lending for Retail Banking Gavin Opperman, reiterated the bank's objective to keep people in their homes.

He said: "We are in the business of providing finance to prospective home owners - we are not in the business of owning properties ourselves."

Opperman said one of the options Absa offered its customers was the consolidation of debt into their existing bond, with the main objective being to improve the customer's cash flow thereby alleviating existing financial distress.

But, Standard Bank Home Loans product director Shaheen Adam said although debt consolidation made sense, ideally consumers needed to try to pay off short-term debt such as credit card repayments sooner to reap from the benefits of lower interest rates.

First National Bank property strategist John Loos said FNB agreed that extending short-term debt into a longer-term was not always good, but current economic conditions necessitated people looking into the consolidating option.

Dick Mhango, spokesman for Nedbank, said: "At Nedbank, the debt counselling department is the point of contact for all debt counsellors and clients."