/ 16 December 2010

Banks agree on debt review termination reprieve

If you have a mortgage with a bank and you entered debt counselling before November 30 2010 and your case has not yet been resolved, you’ll be pleased to know that there’s a possibility that you might not lose your home while challenges with regard to terminations still remain between the National Credit Regulator (NCR) and credit providers.

These challenges include different legal interpretations on whether banks could terminate the debt-review process and begin the process of attaching consumers’ assets.

Until the high court has ruled on these matters, the NCR’s recommendation that the banks hold off on termination is prevailing until June next year.

This moratorium further applies to clients currently making payments on the agreements who will, by March, meet at least 80% of the contractual instalment in respect of mortgages, 70% of the instalment in terms of vehicle finance and 1,67% of the balance outstanding in respect of other debt.

“Provided these payments and other obligations are met, the consumers and their debt counsellors will be allowed time to finalise these matters through consent or through a court decision, until June 30 2011,” says Peter Setou of the NCR.

The idea is to allow people to keep their homes, because there are about 22 000 South Africans under debt review who have mortgages, according to Paul Slot of Octogen.

Banks have agreed to wait until matters are resolved, giving consumers time to meet their obligations.

If you think you may qualify, contact your mortgage bank to find out what the conditions of the moratorium are, and whether you can have any termination and enforcement action suspended before it costs you your home (note, though, that the moratorium doesn’t apply to cases already finalised through the courts or by agreement).

The banks can be contacted on the following numbers:

  • Absa: 0861 005 901
  • First Rand Bank: FNB: 0860 111 005 & Wesbank 0861 288 272
  • Nedbank: 0860 109 279
  • Standard Bank: 0860 439 770

Consumers can also contact the National Debt Mediation Association on 0861 116 362 for advice and assistance.

Read more news, blogs, tips and Q&As in our Smart Money section. Post questions on the site for independent and researched information