Without prejudice to my rights!

To whom this my concern

I am Morne Prinsloo, the owner of Mortgage Plus and in my view and years of expertise in the home loan industry, there is a  definite need for  Originators, to stand together and get the job done!   As dedicated and devoted bond originators in South Africa we would have to work together to make this Industry a successful, professional and a reliable service, to all our consumers in the property market.

For example, I had a client yesterday that I could not help with a new home loan because of the banks not willing to work together with the originator channels and between themselves. In the mean time, the consumer “client” is suffering.

The abovementioned client had made an offer to purchase which he  signed through an  estate agent, The client approached me for professional advice and ask me if I could assist him with his home loan application form. UNFORTUNATELY, I had to show him away because of the existing terms and conditions between the banks and originators. We need to work together and not  against one another.

I have noticed  this every single day for the past 6 years and yet no one is ever willing to stand up and do something about it.

Within the new Consumer Protection Act  it clearly states that the consumer has a choice where and with whom he wanted to do business with and the client should have the option of making sure that he obtained a loan from a Financial Services Provider of his choice

For instance, the property that the abovementioned client put an offer in  on is a PIP (property in possession) property from ABSA bank,  so Nedbank and First National Bank wouldn’t assist him according to their rules and so that left me with Standard bank and Absa only. Standard bank would look at the client,  but because he is an  Absa client, however  they will only assist us with a 90% bond “if we’re lucky”. Now it leaves me with one option only ABSA.

We could then do the loan through Absa,  but only at 70% LTV (loan to value) BUT! If the client went directly to the branch, they would offer them a 100% home loan and pay their transfer cost?

Generally:

ABSA: Bond Originators do not even submit their deals to Absa anymore because of their stringent terms and conditions: 70% loans through originators and 100% directly through a branch.  My question is,  would  you refer the consumer where you know you’re not going to get the deal through “70% Ltv” or would  you rather then go to the opposition for example First National Bank where there’s a much bigger chance to get the deal through at a higher percentage loan?

Standard Bank:  Advertise discounts on legal fees and bigger loans through the media to get direct business and grow their  market share, but what about the thousands of Bond Originators and Estate Agents out there in the market that was always  willing to give you the business in the recent past history?

Nedbank: Everybody took a “knock” during the recession, but it is impossible do business through your bond originating channel, but in the same breath they are financing a Lynnwood Bridge Office Park Development in Pretoria for R 1.2 Billion.

First National Bank: All compliments to FNB,  reason being that everything is above board and across the board with no “hidden Agenda”, so to speak!  What goes for the one goes for the other and there is no difference if the client went to a branch or submitted through a bond originator.

In conclusion

I would welcome it if we all could work together again in order to provide the best service and relevant package to the consumer!

The market is booming! and we need the assistance and back up from OUR  Financial Institutions,  for the consumer’s sake.

AT MORTGAGE PLUS WE ARE GEARED TO CONTINUE OUR EXCELLENT WORKING RELATIONSHIPS WITH OUR CLIENTS AND THE BANKS COULD ASSIST AND ENHANCE THIS VERY IMPORTANT INVESTMENT CHOICE ANY CLIENT WOULD MAKE IN HIS LIFETIME!!

There IS enough business for all! – Article submitted by Mortgage Plus CEO.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Growing availability of credit may help the residential housing market to regain some momentum from mid-year, but affordability and lack of confidence remain the two major stumbling blocks.

In spite of increased sales, improved buyer activity and further relaxed credit criteria by the banks, the residential property market still has one major hang-up — house prices remain in limbo, with very little exception. After peaking around April last year, deceleration followed and, according to the latest Rode’s Report, prices in January, on a national basis, were down by roughly one percent on the same month a year earlier.

The reasons are fairly straight forward; lack of confidence, job insecurity, fears of upward pressure on household expenses and the threat of higher interest rates. Hardly an environment for a major capital investment…

We have had a minor recovery in the market over the first five months of this year, but it has been too mild to make a significant impact on house price growth.

Buyers with cash and access to funds are active, looking for bargains. The May First National Bank House Price Index reveals a very slight acceleration in price growth from 1.2 percent year-on-year in February to 2.1 percent in May. But if one adjusts this average house price index with the consumer price index (CPI) real house price growth is around -2.5 percent. But again, this is a national average — there are pockets of sunshine amidst the gloom. Some industry analysts suggest that the negative growth trend will reverse shortly after mid-year.

It is a classic case of supply exceeding demand and the mini-recovery may well have a lot to do with the enjoyable summer months. The benefits emanating from the interest rate cuts since mid-2008 have waned and First National Bank’s property strategist John Loos warns: “This reflects the very weak financial and debt position of the household sector following the 2008/09 recession. If the residential market cannot achieve respectable house price growth after such a huge interest rate stimulus a period of house price decline would be the likely outcome of a possible phase of interest rate hiking or of slowing economic growth, or both.”

Fortunately, the outlook for economic growth looks brighter following recent indicators. First quarter GDP figures show a marked improvement in annualised growth to 4.8 percent, which is well ahead of the general expectation. The big question now is whether this growth can be maintained. The first quarter figures are worth analysing; the trade sectors showed positive growth, led by retail and finance and business services. Underperformance came from agriculture, construction and mining, while manufacturing produced an excellent performance, the latter being boosted by basic iron and steel as well as oil refining.

Business indicators tend to correlate well with residential property demand, so the upside in GDP is positive for the market.

Increased willingness by the mortgage bankers to lend should help the market in coming months. According to Saul Geffen, there has been a significant relaxation in deposit requirements, which opens up a much broader homebuyer base.

Other positive news is that the banks’ initial decline ratio is 8.7 percent lower year-on-year at 45.4 percent, while the effective approval ratio has increased significantly from 57.3 percent in April last year to 64.4 percent.

Geffen says that strong April approval rates build on recent record numbers recorded in March, when approval figure was the highest value of approved home loans since October 2008.

According to Standard Bank, mortgages with values between R350 000 and R700 000 comprise the largest share of the market. On the other hand, the bank states: “The proportion of mortgage loans granted attributable to the highest category of income earners recorded the highest annualised growth rate of any income category. In addition, the average size of mortgage loans applied for has seen a steady increase.”

Another indicator is our currency. The strong rand has its detractors, especially those in the export sector. But if the rand wasn’t strong, the effect of oil now hovering around US$107 per barrel would be severe. So despite some rise in inflation it is far from a foregone conclusion that interest rate hiking will take place this year.

Another positive indicator, closer to the residential property market, is the growth in private sector credit extension (PSCE) in the first four months of the year. The two biggest components, mortgage advances and other loans and advances (corporate credit demand), continue to drive overall growth. Instalments sales also rose in spite of the plethora of public holidays. Total credit extended to households remained at a relatively healthy pace.

At present we are just hanging in…

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za