South Africans, says Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, can be grateful that its banks applied the National Credit Act rulings in time to prevent the across-the-board credit problems experienced in Europe and the USA.
Nevertheless, he says, there are now continual calls for a slight revision or easing up of the criteria on which the banks now ‘score’ mortgage bond applicants.
“I do appreciate that a return to the old one-on-one personal way of assessing a bond applicant, rather than using a hard and fast computerized set of credit rules, is not feasible for a major bank handling hundreds of applicants each month. However, it is worth noting that one or two financial institutions going this route are becoming increasingly popular with the public and growing their loan books steadily. Perhaps the commercial banks should be considering setting up ‘special cases’ teams of credit assessors to whom bond applicants could appeal if they have a good case but have been turned down due to the banks’ rigid scoring systems.
“At Rawson Finance,” says van Alphen, “we have found that the more personal and flexible our stance with clients is, the more we are able to find innovative solutions that are satisfactory to the banks’ bond assessors.”
Right now, says van Alphen, a 10% increase in the number of bonds awarded is “just what the South African residential property sector needs” and he and his colleagues are convinced that this could be achieved without increasing the banks’ risk profiles in any way.
