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Home Loans

With a national population of 52,98 million,1 the fact that the entire home loan market comprises about 14 million households2 does not seem out of kilter for our emerging economy. However, we all know that a large percentage of our population is housed informally – and the potential for growth in the formal housing sector is, therefore, ripe indeed. That signifies good news for the home loans and mortgage bond industry.

The Home Loan and Mortgage Disclosure Act 20003 aims to promote fair lending practices, including the disclosure by financial institutions of information regarding the provision of home loans. The Act is administered by the Minister of Human Settlements.

There is an omnibus section in the Act4 which criminalises the contravention of, or failure to comply with, any provision of the Act. What follows is a summation of the generally applicable stipulations, provisions and prohibitions.

  1. Every bank, mutual bank and every registered financial institution whose business is, in full or part, providing home loans must disclose, in its annual financial statements, the total number, and amount in rands, of:5
    • completed home loan applications received, according to categories of borrowers and geographic areas;6
    • those declined, and the reasons for the rejection;
    • those approved; and
    • those closed and paid out,

    in the relevant financial year and for the immediately preceding financial year.7

  2. This information may not be disclosed otherwise than as so provided, or as is required by law.8
  1. See www.statssa.gov.za, as at mid-2013. 

  2. The statistic expressed by FNB Housing Finance CEO Marius Marais, recorded in an interview posted on 13 November 2013 at http://www.sacommercialpropnews.co.za/property-investment/6460-affordable-housing-demand-in-sa-heading-for-superlative-growth.html – ‘Affordable housing demand in SA heading for superlative growth’. 

  3. As amended; the latest amendment was effected by Act 34 of 2005. 

  4. Section 15(1). 

  5. Section 3(1). 

  6. As may be prescribed. 

  7. Section 3(2). 

  8. Section 3(3).