Bond registration process

http://www.meumannwhite.co.za/bond_reg.php

A Client will often require funds to assist in the purchasing of a property, or to improve their existing property, or to consolidate his or her debt. In order to cater for their needs they will go to a Bank for a loan. Let's describe the Bond registration process in relation to the above needs.

Purchase of a new Home

The client will make an application for a loan to the Bank setting out full details of assets and liabilities. Once the Bank has approved the loan, the Attorneys (Conveyances) are instructed to attend to the registration by means of a letter of grant setting out the conditions of the grant of loan and requesting that as security for the loan a Mortgage Bond be registered in favour of the Bank over the property being purchased.


The Attorney attending to the transfer of the property (Transferring Attorney) will be contacted by the Bank's Attorney requesting from them a copy of their draft title deed. The Bank's attorney will also make contact with the client (also known as the Mortgagor) and request copies of their Identity documents and marriage certificates if applicable. When the Bank's attorney receives the above mentioned documents he will draw the mortgage bond documents and will call upon the client to sign and pay the proforma account for the registration of the Mortgage bond. Payment thereof will be required immediately especially as the costs include stamp duty and deeds office lodgment fee which must be paid up front. The documents to be signed are as follows:


A Power of Attorney to Mortgage. – this document gives the attorneys the Authority to register a mortgage bond on behalf of the clients in favour of a Bank.

Authority for payment – this document instructs the Bank on registration to make payment of the borrowed funds.

Letter of grant – this is the terms and conditions of the Bank where upon signature the clients acknowledges its obligations to the Bank.

Draft Mortgage Bond – this is the document that records the client's financial obligations to the Bank in the deeds office.

Affidavits – this confirms the clients personal particulars regarding marriage and insolvency.

Surety ship - is required when a client needs a guarantor for the loan.

Cession of Life Cover – should life cover be required by the Bank – the client cedes an existing policy or takes out a new policy.


After signature and payment of costs have been received, the Attorneys prepare the necessary guarantees to secure the purchase price of the property. These guarantees are then forwarded to the transferring Attorneys. The Power of Attorney and draft Mortgage bond are forwarded to the Deeds registration Office in Pietermaritzburg where the documents are systematically checked over a period of 6 days and registered on the 7th day. On registration the transferring attorney presents the guarantees to the Bank and receives payment of the funds. The New mortgagor's loan is now operational and monthly payments will be due from the 1st day of the month following registration.

Improvements and Consolidation of Debt

The Bank will forward the letter of grant together with the title deeds to the Attorneys to register a bond for the amount of the loan that has been granted to the client. Thereafter the procedure is similar to the above except there is no interaction with any transferring attorneys.

Whenever a Mortgage Bond has been registered it affords the client access to the funds and affords the bank good security for the loan given.