Industry news

New Distressed Mortgage Solutions needed for Banks and Homeowners

October 5, 2023

South Africa’s property prices were not in great shape prior to the Covid-19 pandemic. Residential house prices since 2010 have failed to keep up with inflation. On top of this, properties sold in distressed situations via a “Sale in Execution” usually only achieve 40 to 70% of market value.

To mitigate lending risk in these subdued market conditions, banks have introduced “Assisted Sale” processes which have ensured defaulting mortgage clients can sell their properties with the help of an Estate Agent without the stigma of distress. The results have been beyond initial expectations, with properties frequently selling for 90% of market value, ensuring that both the client and bank reach a more
reasonable outcome.

However an Assisted Sale process typically lasts for 3-6 months, and should it fail, a Sale in Execution is the only remaining option. Apart from the likely loss in value by going this route, there are a number of other risks in a foreclosure process.

The Covid-19 pandemic is likely to aggravate the situation for distressed home owners and banks. Lightstone is predicting house prices to drop by as much as 15% in 2020 as a result of the economic impact of the lockdown. The prices achieved in a distressed sale are likely to be far worse.

Furthermore, banks’ abilities to exit a distressed mortgage situation are certain to be limited as evictions are currently prohibited under lockdown regulations and no lender wants to incur the ire of the government and media by not assisting struggling home owners. With the top 4 banks already sitting on R28 billion in non-performing home loans, there is a desperate need for alternative mechanisms for lenders to resolve distressed home loan situations, while assisting home owners get back on their feet, and into more affordable housing.

Author: Andrew Watt

Nimble Group
© Copyright Nimble Credit Solutions 2023

St Agnes Primary School

St Agnes is a public school situated in Woodstock, Cape Town.

Nimble Group actively supports St Agnes Primary School through the Partners for Possibility programme. We dedicate resources to a variety of initiatives aimed at creating an enhanced learning and recreational space, enriched student experience, and optimized day-to-day running of school operations.

Computer room upgrade Our dedicated team of IT technicians has upgraded the school’s IT hardware and software, creating a more user-friendly and modern environment for students and teachers using the computer room daily.

Playground painting and revitalization
Our enthusiastic volunteers devoted their time to painting vibrant murals and interactive games on the walls and paved areas of the playground.

Enriched student experience
Nimble strives to continuously improve the student experience by celebrating academic excellence, sponsoring prize-giving events, and more.

Day-to-day operational support
We also contribute to the school’s operational efficiency by offering administrative support and providing access to Nimble’s HR and Finance functions.

Peak Child

Nimble Group has taken the initiative to establish an Early Childhood Development Centre, which began operating in January 2019 in Woodstock, Cape Town. The centre operates under the guidance of Peak child, and while accessible to the public, primarily serves as a subsidized preschool for the children of Nimble staff.

Peak Child aims to equip children with the best possible foundation for life by providing affordable, high-quality preschools in close proximity to workplaces, catering to the needs of emerging middle-class parents. Since its inception, Peak Child has focused on collaborating with socially responsible employers to support their staff beyond conventional employee benefits.

Peak Child offers comprehensive programmes for children aged 3 months to 5 years. Through partnerships with prominent educational experts and local primary schools they ensure that children transitioning from Peak Child are socially, academically, and physically prepared for admission to any of Cape Town’s leading primary schools. Peak Child currently operates three schools, including Peak Child Nimble.

Nimble has made a significant investment in this project, with plans to replicate this model close to its Johannesburg offices.

Altius et Latius Trust

The Altius Et Latius Trust is a school education initiative aimed at providing bursaries to historically disadvantaged students, enabling their attendance at top schools in Cape Town.

The primary goal of the trust is to promote equitable access to high-quality public education, fostering lasting transformation. Their objective is to support fifty talented learners in gaining admission to high-performing schools.

Nimble Group continually makes a substantial impact on this crucial initiative by providing essential resources for additional student support, such as tutoring, funding for school events or excursions, sporting equipment and more.