Homeowners in deep debt

Hard-pressed South Africans are so worried about losing their homes that they are turning to unsecured debt providers to servicetheir homeloan payments.

South African consumers are R1.66 trillion in the red, according to the National Credit Regulator (NCR).

The latest data also notes that a big amount of this debt is in the form of mortgages, vehicle repayments, clothing accounts as well as secured and unsecured credit facilities.
Although nationally home loan ‘non performing loans’ are at cyclical lows, DebtBusters CEO Ian Wason is of the view that this is due to the fact that about 30% of homeowners are borrowing short-term unsecured debt to keep these artificially high.

Neil Roets, the CEO of Debt Rescue, said his firm continues to see an increase in applications for debt review where there are home loans involved and where the home loan is frequently in arrears.

He strongly advised consumers to seek the help of a debt counsellor as soon as they receive the Section 129 letter, as a debt counsellor cannot assist on accounts where legal action has already been initiated.

Wason explained further that once legal action has started, a consumer will immediately be incurring legal costs and handed over to the bank’s legal department, who will draw up a sale in execution document and make an application to court to repossess your home. If you don’t pay, then this is what they are forced to do.”

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