Home | Business | CBE TO INVESTIGATE MORTGAGE STAKEHOLDERS’ MALPRACTICE

CBE TO INVESTIGATE MORTGAGE STAKEHOLDERS’ MALPRACTICE

Font size: Decrease font Enlarge font

MBABANE – The Central Bank of Eswatini (CBE) is investigating allegations of irregular practices by key stakeholders in the mortgage sector with respect to repossession of consumer properties.

A mortgage is a debt instrument, secured by the collateral of specified real estate property that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large real estate purchases without paying the entire purchase price upfront. Over many years, the borrower repays the loan, plus interest, until he or she owns the property.

This is according to a statement made by the CBE Governor, Majozi Sithole last week. This will be part of a review of the mortgage loan processes and mortgage based funding processes.
The CBE has therefore invited any member of the public who has information or evidence concerning any misconduct or malpractice in the mortgages sector by any bank or the Eswatini Building Society, (including their duly authorised agents) to provide that information or evidence, on or before June 30, 2019.

Ramifications

Sithole, in the statement, said mortgage loans for many consumers represented the biggest financial commitment of their lives. He said as such, it was important that customers understood the ramifications of such financial commitments and appreciated the wider responsibilities and rights that they had as homeowners. “The mortgages sector invariably plays a vital role in Eswatini’s economy, so it is important that the conduct of market players in this sector is equitable and fair, to ensure that competition works effectively,” he said.

Decisions

He said the CBE has noted with concern, the challenges faced by consumers in this sector. He said these challenges were there either because the available tools to help consumers make effective decisions, when choosing a mortgage, did not fully meet their needs or because of commercial relationships that existed in the sector that may lead to conflict of interest or misaligned incentives to the detriment of consumers. “These challenges magnitude manifests itself through the rate and manner in which mortgaged properties are acquired and sometimes quickly repossessed and disposed of in the country,” Sithole said.

 

 

Comments (0 posted):

Post your comment comment

Please enter the code you see in the image:

: SCHOOL GANGSTERISM
Are parents to blame for pupils joining gangs in schools?