Absa, bond originators in agreement
Absa has successfully renegotiated its agreements with bond originators regarding commissions paid to them and the quality of applications submitted to the bank.
The policy is unlikely to change, even if the residential property market recovers in years to come.
Gavin Opperman, group executive of Secured Lending at Absa Retail, said that agreements with the major bond originators had been concluded and that negotiations with smaller originators would be finalised by the end of this month.
Opperman believes that interest rates will come down again by 100 basis points in April and June, and by a further 50 basis points in August, but he does not expect this to have much effect on the property market until the end of this year, or even into 2010.
"Because of changing economic patterns it was necessary for us to change our lending model. If we were lending at the same rate as three years ago, we would not be in existence now."
Opperman appealed to clients encountering financial problems to approach the bank for assistance.