Financial regulations and standards in the low income property market of South Africa

In examining the propensity to default on mortgage loans amongst low income households of Protea Glen, in Johannesburg, South Africa, part of the objectives was to examine financial regulatory instruments and measures aimed at ensuring fairness in the mortgage finance environment. The rationale was prompted by the assumption that regulatory instruments and protection measures were feeble and lack significant oversight as non-disclosures were prevalent with regard to mortgage contracts. Moreover, that misinformed mortgage borrowers were enticed to take up loans that were unaffordable to their financial situations. The adopted research approach by the author in analysing findings through an SPSS as an appropriate statistical technique was to employ a regression model to measure the association between independent variables and dependent variables. The regression model was to predict the outcome variable propensity to or non-payment behaviour, using regulatory information and borrower’s understanding of existence and effectiveness of these regulatory initiatives with regards to their rights with the lender. In addition to quantitative analysis, qualitative experimentation was employed in testing the relationship and interesting scientific findings emerged.