Our primary offering to lenders was the CRI. They effectively swap a portion of assumed risk for the insurance premium, which in turn provides a platform for affordable, available housing finance:

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  • The bank bought CRI from HLGC, to take the place of the 20-30% deposit the borrower would otherwise have had to pay in cash to access the home loan.  

  • The bank was the insured party, as it was its risk that was covered.

  • The banks could therefore make 100% loans to qualifying borrowers who could afford the installments and strictly comply with the credit policy requirements.

  • The fundamental principle underlying this product was that everyone is at risk – the borrower, lender and HLGC, which ensures that it is in everyone's interest to apply the rules and abide by the processes.

  • The indemnity offered in terms of the CRI was premised on banks' mortgage advances in terms of established and acceptable lending criteria. These criteria form part of the insurance agreements, as does the debt management process to be followed in the event of default

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Key Facts of CRI

  • CRI provided partial cover to banks where borrowers’ incomes at loan assessment were defined as lower or middle income.

  • It covered risk of up to a maximum of 30% of the value of the property (or the purchase price), to replace the deposit requirement.

  • All parties were at risk.

  • The cover was purchased where borrowers were unable to provide the required deposit, at an appropriate annual premium.

  • It was for a 5 year guarantee, renewable under terms and conditions.

  • The quantum of guarantee paid out was determined by the amount received at the sale of the property - where the default debt at the time of the sale, less the realized amount, less any other collateral, results in a short fall not exceeding the indemnified amount.

  • The loan had to adhere to the usual, appropriate and accepted credit criteria of the lender.

  • Borrower education was a precondition to cover.

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