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8/4/2019 Banks Origination Overview Presentation August 2011
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8/4/2019 Banks Origination Overview Presentation August 2011
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8/4/2019 Banks Origination Overview Presentation August 2011
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Origination Overview:
Application volumes for July showed a 35% year-on-year increase.
Value of granted homeloans in July was 23% higher year-on-year and this
should trend stronger as banks continue to relax their lending criteria and
economic conditions improve.
Bank decline ratios are 1% lower year-on-year.
Effective bank approval rates are currently tracking on 64%.
Ratio of applications declined by one bank, granted by another remains at 23%,
indicating the opportunity that prevails to secure an approval from another bank
on applications initially declined by one bank.
8/4/2019 Banks Origination Overview Presentation August 2011
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Origination Overview: (Continued)
Banks are continuing to relax their credit policies and deposit requirements and
are now once again offering 100% bonds.
Number of buyers purchasing property with a 100% bond requirement has more
than doubled since September 09. Currently 45% of all homeloan applications
processed are for 100% bonds.
Banks are adopting a cautious approach to approving 100% bonds by applying
stricter credit criteria. Only 38% of 100% bond applications are approved and
42% of these approvals are subject to deposits.
Applications with deposits are securing higher approval rates than 100% bond
applications.
90% of ooba applications are granted within 5 days of submission.
8/4/2019 Banks Origination Overview Presentation August 2011
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Bank Loan to Value Criteria:
*
Maximum LTV % based on the Lower of purchase price or bank valuation of
property
VACANT LAND All Loan Amounts = maximum 60%
STD Current Account Holders
All loan amounts = maximum 75%
Non STD Current Account Holders
Loan amount R 1m = maximum 75%
Loan amount > R 1m = maximum 65%
No Loans against will be considered All Purchase prices = maximum 60%
RESIDENTIAL
PROPERTY
(Including
Building Loans)
Completed Property and building loans
All loan amounts = Max 70%
STD Current Account Account Holders
Loan Amount R1.5m = max 100%
Loan Amount > R1.5mR2.5m = max 90%
Loan Amount > R2.5 m = max 80%
Non STD Current Account Holders
Loan Amount R2.5m = maximum 90%
Loan Amount > R2.5 m = maximum 80%
SA Citizens Living and Working Abroad:
All Loan Amounts = maximum 70%
Nedbank Retail Customers:
Loan Amount R1.5m = max 100%
Loan Amount >R1.5m R3m = max 90%Loan Amount >R3m = max 80%
Non-Nedbank Retail Customers not subject to
Mandatory Industry Submission pending
Timeframes:
Loan Amount R3m = max 90%
Loan Amount >R3m = max 80%
Non-Nedbank Retail Customers subject to
Mandatory Industry Submission Pending
Timeframes:
All Loan Amounts = Max 60%
The loan amount including the Initiation Fee
may not exceed the above maximum ltv
parameters.
Only Self- Employed Individuals who have aPrimary Business Relationship with Nedbank
will be Considered
Nedbank Properties
In Possession = maximum 100%
A. C ompl et ed P rope rt y:
Purchase price R2.0m
Salaried Applicant = max 100%
Self-employed Applicant = max 95%
Purchase price > R2.0m R3.0m
Salaried Applicant = max 95%
Self-employed Applicant = max 90%
Purchase price > R3.0m
Salaried Applicant = max 90%
Self-employed Applicant = max 85%
A. Building Loans:
All purchase prices = max 85%
Same guidelines are applicable for FNB ONEACCOUNT
FURTHER LOANS
A. Vacant Land = Maximum 60%
B. Completed Property
Loan Amounts R1.5m = maximum 90%
Loan Amounts > R1.5M = maximum 85%
C. Building Loans
Loan Amounts R2.7m = maximum 80%
Loan Amounts > R2.7m m aximum 70%
Same guide-lines for new loans would be
applicable.N/A Same LTV guidelines as above apply
8/4/2019 Banks Origination Overview Presentation August 2011
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Bank Loan to Value Criteria:
APPROVE
D
COLLATER
AL
SECURITY
**
Z573 (Gov/Municipal Guarantee)
OR
ABSAApproved Group Scheme
OR
ABSA Fixed Deposit (100% value)
OR
Other banks Fixed Deposit (90% value)
OR
Life Policies with surrender value (100% of
free S/V no premium debt)
OR
Covering bond over un-bonded
residential property (80% of
ABSA
value ofproperty)
If collateral is provided by a 3rd party (i.e.
other than the applicant), it will need to be
supported by a limited suretyship from the
3rd party in favour of the applicant to the
value of the security provided
Z573 (Gov/Municipal Guarantee)
OR
Covering bond over an un-bonded
residential property
(owner MUST be applicant)
Nedbank Fixed Deposit
OR
Covering bond over an un-bonded
residential property.
No forms of collateral security have been
approved.
COST
INCLUSIV
E LOANS
Only offered on the My HomeProduct
(affordable market)
Only available for First Time Homebuyers
who apply directly to Standard Bank and on
the Affordable Housing product
No cost inc lus ive p ro du ct avai lable No cost inc lu sive p ro du ct available
DISTRESS
ED SALES
Summit Listings has the exclusive origination
contract for ABSA Distressed Sales.100% LTV availa ble for purchasers of
Standard Bank Distressed Sales through all
channels
100% LTV availa ble for purchasers of
Nedbank Distressed Sales through all
channels
Purchasers of FNB Distressed Sales must apply
directly to FNB for finance.
SA
CITIZEN
WORKIN
G
ABROAD
LTV 70% LTV 70% Nedbank Retail Customers Only
LTV 90%
LTV 50%
NON-
RESIDENT
CLIENTS
WITH
WORK
PERMITS
LTV 50% - Individual Application
LTV 70%- if joint app with SA citizen
(up to R2.7mil)
LTV 50% N/A LTV 50%
8/4/2019 Banks Origination Overview Presentation August 2011
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Affordable Lending Guide-Lines By Bank:
Special Notes: Nedbank currently does not have an Affordable Lending Product. Ithala Bank will only grant loans where the property is situated in KZN.
Special Notes: Nedbank currently does not have an Affordable Lending Product. Ithala Bank will only grant loans where the property is situated in KZN.
Bank Product Name: My Home Affordable Housing Smartbond KZN Only - No specific productname
Maximum Income Qualifying
Criteria:
Single / Joint Monthly Income:
Maximum income of R15 498
Single / Joint Monthly Income:
Maximum income of R15 498
Single Applicant:
Maximum income of R16 000
Joint Applicants:
Combined income may not exceed R16 000
No maximum income limit
Maximum Installment toIncome Ratio
All income brackets:Based on Affordability
All income brackets:Maximum 40%
All income brackets:Based on Affordability
All income brackets:Maximum 30%
Maximum Loan to Value
Ratio70%
100% - Non First-Time Buyer
104% - First Time Buyer100%
100% - Maximum Loan Amount
of R500 000
90% - >R500 000 R800 000
80% - Loan Amount greater
than R800 000
Vacant LandNo No No Yes
Maximum Loan to Value 60%
Maximum Loan AmountMaximum in terms of affordability and LTV
criteriaMaximum in terms of affordability Maximu m in terms of afford ability Maximum in terms o f affor dab ility
Life Assurance CompulsoryYes Yes Yes Yes
8/4/2019 Banks Origination Overview Presentation August 2011
8/17
Credit Market Conditions:
Banks appetite for lending is gradually recovering and increasedcompetitiveness for homeloan business amongst banks is becomingevident.
Bank approval rates are still inhibited by consumers high debt toincome ratio and impaired credit records.
Although banks are competing on pricing, average homeloan interestrate concessions are lower year on year due to the higher costs offunding.
Banks are recording a slower growth in the number of non-performingloans.
Property market growth has moderated in 2011 due to the slowereconomic growth trend. July 11 House Price Indices are showingslow and, in some sectors, negative price growth.
Credit Market Conditions:
8/4/2019 Banks Origination Overview Presentation August 2011
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100% Bond Statistics
Huge increase in 100% bond applications:
100% LTV 18%
90% - 99.9% LTV 40%
80% - 89.9% LTV 18%
70% - 79.90% LTV 9%
60% - 69.9% LTV 6%
8/4/2019 Banks Origination Overview Presentation August 2011
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Bonds Approval Analysis: 100% LTV
Only 38% of 100% bonds submitted are ultimately converted
100% LTV 58%
90% - 99.9% LTV 35%
8/4/2019 Banks Origination Overview Presentation August 2011
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Bond Approval Analysis:80% -
8/4/2019 Banks Origination Overview Presentation August 2011
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ooba has highly skilled consultants who prepare, motivate and
package applications for maximum chance of approval
ooba consultants have access to senior ooba regional
management to escalate complex applications for maximum
chance of approval
ooba consultants also have access to a dedicated senior head
office team who have direct access to bank credit to escalate
complex applications for maximum chance of approval
ooba Offers Estate Agents a Better Chance of Bond Approval
8/4/2019 Banks Origination Overview Presentation August 2011
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Absa Overview:
Currently declining 46% of applications submitted
40% of applications declined by Absa are granted by another bank/s
75% of loans submitted to Absa are granted within 5 days
Julys results reflect that ABSAs pricing in the lower loan to value
bonds was more competitive
8/4/2019 Banks Origination Overview Presentation August 2011
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Nedbank Overview:
Currently declining 54% of applications submitted
30% of applications declined by Nedbank are granted by another bank/s
95% of loans submitted to Nedbank are granted within 5 days
Julys results indicate that Nedbanks pricing was uncompetitive
8/4/2019 Banks Origination Overview Presentation August 2011
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FNB Overview:
Currently declining 60% of applications submitted
28% of applications declined by FNB are granted by another bank/s
88% of loans submitted to FNB are granted within 5 days
Julys results reflect that FNBs pricing was the most competitive
8/4/2019 Banks Origination Overview Presentation August 2011
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Currently declining 35% of applications submitted
9% of applications declined by Standard Bank are granted by
another bank/s
92% of loans submitted to Standard Bank are granted within 5 days
Julys results reflect that Standard Banks pricing remains
conservative
Standard Bank Overview:
8/4/2019 Banks Origination Overview Presentation August 2011
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General:
Banks are focusing on:
Bad Debt Limitation
Cost ofFunding
Profitability
Quality of Applications
Retention of own customers business
Reducing NTUs
Processing Costs efficiencies
Fraud Prevention
Streamling Bond Conveyancing Panels