FNB bonds 'reassessed'

First National Bank was not withdrawing already approved bonds, but rather 'reassessing' bonds where homes had not yet been transferred, FNB home loans chief executive Jan Kleynhans said on Monday.

Reacting to criticism from the Ombudsman for Banking Services, Advocate Clive Pillay, Kleynhans said bonds granted more than a year ago were being reassessed. "This applies to situations where people have bought off-plan, or where the home is still being developed — the National Credit Act compels us to make sure that the customer can still afford the home loan. So much has happened in the last year with interest rate rises and the cost of living," Kleynhans said.

Pillay said he was worried that FNB's customers could be unduly prejudiced. "A bond is a guarantee and on the strength of this guarantee the purchaser takes on legal contractual obligations. He pays a deposit, plus the attorney's fee and transfer duty. He may well have sold his home — he's committed to that purchase and if the bank suddenly withdraws the bond, then everyone loses."

Pillay confirmed that the purchaser would recoup only transfer fees — "and this could take some time."

However, he said, FNB had undertaken to pay attorney's costs if a bond was withdrawn.

Asked if this was not an admission that FNB was in the wrong, Kleynhans said "there is no right or wrong in the matter".

Business Report said last week that the Standard Bank had no intention of withdrawing home loans that it had already granted.

Article from: www.iafrica.com