Transcript Document

Origination Overview Presentation
June 2010
oobarometer Analysis:
Indicator
May
2010
May
2009
Change yr on yr (May 10
vs May 09)
Apr
2010
Change month on month (May 10 to
Apr 10)
Avg purchase price
872,083
777,277
12.2%
881,044
-1.0%
Avg purchase price
of first time buyer
604,857
554,303
9.1%
626,719
-3.5%
Avg approved bond size
716,862
608,337
17.8%
689,613
4.0%
17.8%
(R155,221)
21.7%
(R168,940)
-18.0%
21.7%
(R191,431)
-18.0%
Avg age of applicant
37
38
1 Year Younger
37
No Change
Avg decline ratio
52.9%
49.5%
3.4%
54.1%
-1.2%
Ratio of applications declined
by one lender but approved by
another
16.2%
22.6%
-6.4%
21.1%
-4.9%
Avg deposit (as % of purchase
price)
Origination Overview:
Application volumes for May showed a year-on-year increase of 35%.
Granted bond conversion ratios are still lower year-on-year but this should trend
stronger as banks continue to relax their lending criteria and economic
conditions improve.
Bank decline ratios are still marginally higher year-on-year but have shown a
month-on-month improvement.
Ratio of applications declined by one bank, granted by another is trending at a
lower ratio predominantly due to the stricter credit criteria banks are imposing
on 100% bonds.
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.
•
Banks are adopting a cautious approach to approving 100% bonds by applying
stricter credit criteria. Only 31% of 100% bond applications are approved and
49% of these approvals are subject to deposits.
•
Applications with deposits are securing higher approval rates than 100% bond
applications.
•
91% of ooba applications are granted within 5 days of submission.
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%
RESIDENT
IAL
PROPERT
Y
(Includin
g Building
Loans)
A. Completed Property:
ABSA Customers who are employed:
Loan Amounts ≤ R 1.5m
= max
100%
Loan Amounts > R 1.5m –R2.7m= max
90%
Loan Amounts > R2.7m
= max
85%
(Except for Legal Entities who will only
qualify for a maximum ltv of 85%)
ABSA Distressed Properties &
ABSA PIP’s
= max
100%
ABSA Customers who are self-employed:
Loan Amounts ≤ R2.7m = maximum 85%
Loan Amounts > R2,7m = maximum 75%
Non- ABSA Customers :
All Loan Amounts = maximum 70%
B. Building Loans:
ABSA Customers:
Loan Amounts ≤ R 2.7m = maximum 80%
Loan Amounts > R 2.7m = maximum 70%
Non-ABSA Customers
All Loan Amounts = maximum 65%
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 – maximum
70%
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%
STD Current Account Account
Holders & 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
70%
=
maximum
Same guide-lines for new loans
would be applicable.
All loan amounts = maximum
70%
Nedbank Properties
In Possession
= maximum
100%
Loan Amount ≤ R 3m = maximum
100%
Loan Amount > R 3m = maximum
85%
Non-Nedbank Customers who
are self-employed:
Loan Amount ≤R3m = maximum
90%
Loan Amount >R3m = maximum
85%
Nedbank Properties
In Possession
= maximum
100%
Initiation fee permitted for
inclusion in loan amount but only
provided that total loan, including
initiation fee, does not exceed
maximum ltv cap of 100%.
All loan amounts = maximum 80%
Same guidelines are applicable
for Further Building Loans
All Purchase prices = maximum 60%
N/A
A.Completed Property:
Purchase price ≤ R2.0m = maximum
100%
Purchase price > R2.0m = maximum
80%*
(* Awaiting confirmation from FNB
of revised ltv criteria)
A.Building Loans:
Purchase price ≤ R2.0m = maximum
90%
Purchase price > R 2.0m = maximum
80%*
(*Awaiting confirmation from FNB
of revised ltv criteria)
Same guidelines are applicable for
FNB ONE ACCOUNT
ABSA Savings & Current Account
Holders
Purchase price ≤ R 2.7m =
maximum 85%
Purchase price > R 2.7m =
maximum 75%
NON ABSA Savings & Current
Account Holders
All Purchase Prices = maximum
70%
For Further advance or ReAdvance a cap of R 5m must be
applied.
Bank Loan to Value Criteria:
APPROV
ED
COLLATE
RAL
SECURIT
Y **
Z573 (Gov/Municipal
Guarantee)
OR
ABSA Approved 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 of property)
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.
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 an unbonded
residential property (current LTV
caps will apply to the collateral
property)
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
** If approved collateral security is ceded to the bank, reducing the risk to the relevant permissible level, a higher loan amount may be considered.
COST
INCLUSI
VE
LOANS
Only offered on the ‘My
Home’Product’ (affordable
market)
Only available for First Time
Homebuyers who apply directly to
Standard Bank and on the
Affordable Housing product
No cost inclusive product available
No cost inclusive product available
No cost inclusive product available
Affordable Lending Guide-Lines By Bank:
Bank Product
Name:
Maximum
Income
Qualifying
Criteria:
Maximum
Installment to
Income Ratio
Maximum
Loan to Value
Ratio
My Home
Single / Joint Monthly Income:
Maximum income of R15 142
All income brackets:
Based on Affordability
80% - without Collateral
Security
100% - with Collateral Security
110% - With CRIS Guarantee
(Collateral Replacement
Indenmity Scheme)
Affordable Housing
Single / Joint Monthly Income:
Maximum income of R15 498
All income brackets:
Maximum 30%
100% - Non First-Time Buyer
104% - First Time Buyer
Smartbond
Single Applicant:
Maximum income of R15 000
Joint Applicant’s:
Combined income may not
exceed R15 000
All income brackets:
Based on Affordability
No specific product
name
specific product
name
Single/Joint Monthly Income:
Maximum income of R18 000
No maximum income limit
Income up to R3500:
Maximum 25%
Income > R3501
Maximum 30%
All income brackets:
Maximum 30%
90% - without Collateral
Security
100% - with Collateral Security
100%
KZN Only - No
100% - Maximum Loan
Amount
of R1m
95% - >R1m – R1.5m
80% - Loan Amount greater
than R1.5m
No
No
No
No
Yes
Maximum Loan to Value – 60%
Maximum
Loan Amount
Maximum in terms of
affordability
Maximum in terms of
affordability
Maximum in terms of
affordability
R 400 000 – 100% Risk
R420 000 – Costs Inclusive
Maximum in terms of
affordability
Life Assurance
Compulsory
Yes
Yes
Yes
Yes
Yes
Vacant Land
Credit Market Conditions:
Credit Market Conditions:
Banks appetite for lending is gradually recovering and increased
competitiveness for homeloan business amongst banks is becoming
evident.
Bank approval rates are still inhibited by consumers’ high debt to
income ratio and impaired credit records.
Although average homeloan interest rate concessions are still lower
year on year, there is evidence that banks are starting to compete on
pricing.
Banks are recording a slower growth in the number of non-performing
loans.
Property market is gearing itself for a gradual recovery during 2010,
already evidenced in the consistent house price growth recorded in
the house price indices released by the banks and ooba for May 2010.
Application Loan to Value Analysis
May 2010
Aug 2009
100%LTV
43%
100% LTV
18%
90% - 99.9% LTV
22%
90% - 99.9% LTV
40%
80% - 89.9% LTV
10%
80% - 89.9% LTV
18%
70% - 79.90% LTV
8%
70% - 79.90% LTV
9%
60% - 69.9% LTV
5%
60% - 69.9% LTV
6%
<60% LTV
12%
<60% LTV
9%
Bonds Approval Analysis: 100% LTV
• Only 31% of 100% bonds submitted are approved.
Approval Amount Analysis
100% LTV
49%
90% - 99.9% LTV
36%
<90% LTV
15%
Bond Approval Analysis:
80% - <90% LTV
• 50% of 80% - <90% LTV bonds submitted are approved.
Approval Amount Analysis
80% - 89.9% LTV
89%
70% - 79.9% LTV
6%
<70% LTV
5%
Absa Overview:
Currently declining 45% of applications submitted
14% of applications declined by Absa are granted by another bank/s
92% of loans submitted to Absa are granted within 5 days
May’s results reflect that ABSA’s pricing has improved marginally
Nedbank Overview:
Currently declining 57% of applications submitted
19% of applications declined by Nedbank are granted by another bank/s
95% of loans submitted to Nedbank are granted within 5 days
May’s results indicate that Nedbank’s pricing has improved marginally
FNB Overview:
Currently declining 57% of applications submitted
15% of applications declined by FNB are granted by another bank/s
94% of loans submitted to FNB are granted within 5 days
May’s results reflect that FNB have continued to offer the most
competitive rates in the market
General:
Bank’s are focusing on:
•
•
•
•
•
•
•
•
Bad Debt Limitation
Cost of Funding
Profitability
Quality of Applications
Reducing NTU’s
Processing Costs efficiencies
Fraud Prevention
Streamling Bond Conveyancing Panels