ooba's new service helps bad debt consumers buy homes

In an effort to help consumers out of their debt traps, ooba, SA's largest bond originator, has recently launched oobaassist, a service that helps their clients clear their bad debt records, allowing them to apply for a bond and purchase a home.

"Things are tough out there and a lot of people really need help," said Kay Geldenhuys, Property Finance Manager at ooba (formerly MortgageSA).

"We have introduced oobaassist because we realised that it was necessary to assist our customers who have had their bond applications rejected because of bad debts because they simply didn't know where to start.

"But people with bad debt need to understand that it is not a life sentence. With a service such as oobaassist it is possible for them to own that dream home."

The oobaassist service includes free consultation and financial advice from ooba and also negotiation with creditors to clear peoples' bad debt record at a 25% discount to normal legal fees.

"oobaassist also advises on the best way to pay off bad debts and even negotiates with debtors for the best repayment options."

According to ooba's data, 11% of bond applications are being rejected by all banks because of bad debt records - up 8% from 2 years ago.

"People applying for bonds with bad debt records are faced with a nasty shock when no bank in South Africa is willing to risk granting them a bond leaving them with seemingly very few options," noted Geldenhuys.

"Even if you have managed to climb out of the debt hole and pay back monies owed, without the correct processes of completely clearing your credit record, the bank still views you as a risk.

"And any type of debt can be harmful such as defaulting on municipal rates, credit cards, retail accounts and motor vehicle repayments - banks have access to all of these records which means bad debt can't be hidden," Geldenhuys concluded.

Hello ooba news

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Weak economic conditions, higher interest rates and the global credit crisis have forced banks to be far more picky about who they will lend money and less generous with their lending rates. But Mary Jane Lefevre, Regional Sales Manager of ooba, said that before you apply for a home loan, there are steps you can take to improve your credit status and encourage lenders to look more favourably on your application.