Industry news

Rebound – Nimble’s Mortgage Resolution Plan

October 5, 2023

Many homeowners with mortgage loans found themselves under tremendous stress in 2020 as a result of the Covid-19 lockdowns. People lost their jobs or were living off reduced incomes and couldn’t pay their home loan instalments. Some of these homeowners also face a negative equity situation where their outstanding loan exceeds the value of their property. This means that not only will they face losing their
home, incurring crippling legal expenses, and having their family evicted, but they will also be burdened with a significant debt shortfall and an impaired credit record.

With this in mind, Nimble has now launched Rebound, a new mortgage resolution solution that addresses these properties with negative equity. Rebound offers lenders a better outcome than the Sheriff’s auction which is typically the last resort they face when trying to realize the security underpinning their mortgage loan. And Rebound unlocks the property so that trapped borrowers have a chance to have a fresh

Rebound works by Nimble agreeing to buy the property from the homeowner at a realistic market value and negotiates with the bank to provide significant, and preferably complete, debt relief.

Nimble assesses what improvements can be made to the property, typically through targeted refurbishments, and then resells the property over the next 6-12 months in an orderly fashion outside of a value-destructive legal process. As part of the process, the homeowner is offered the option to stay in the property at an affordable rental while it is being marketed, they avoid legal action and are finally paid a “Home Booster Bonus” – a cash pay-out once the property resells so that they can find a new home and make a fresh start.

The Rebound program offers banks a number of benefits over the Sheriff’s auction. An auction requires a Court judgment which may take as long as 36 months to achieve due to case backlogs and increasing legal obstacles. During this time, rates arrears may accumulate, legal costs run up and interest continue to accumulate. Finally, at the auction itself, the bids are frequently won by syndicates at well below market
value and the bank risks significant reputational risk if their client is evicted by the buyer and goes to the press to complain about their home being sold at less than market value.

Rebound avoids all of these pitfalls for the lender by offering a quick, cooperative, and transparent process with a better economic result and no client conflict.

The opportunity to offer this solution is enormous. The Covid-19 lockdowns resulted in South Africa’s top banks restructuring R176b in loans while a further R38b defaulted. Much of this debt will eventually lead to asset realization and there is little prospect of an improvement in the outcomes from Sheriff’s auctions.
Nimble has already launched several pilots to test its Rebound solution and the response from banks and homeowners has been overwhelmingly positive. Previously uncooperative and distressed clients have leaped at the opportunity to resolve their debt and move onto a new homeownership journey. Banks, meanwhile, have started to shift volumes away from Sheriff’s auctions recognizing the many benefits
of the Rebound solution. While distressed mortgages will remain a dark cloud on South Africa’s credit landscape for some time to come, Rebound now offers a silver lining and unlocks new property ownership and lending opportunities.

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.