Indebted keep house after key ruling

[BTTB]

Indebted keep house after key ruling

Last week, the Constitutional Court ruled that only a judge in the High Court, who must carefully weigh the circumstances of the case, could decide whether a bank may sell a property if the client falls into arrears.

For many years, the decision had been taken by a court registrar.

“Banks will have to show that they did everything in their power to help clients to remain in their houses.”

Snyman says currently when mortgage clients fall behind on payments a “well-oiled machine” is in place for the banks to get approval from the registrar and auction the houses.

Too late for many ex home-owners that lagged behind in their mortgage payments during the recession.
I recall my irate sister calling me up in 2007/8 being behind one or two months on her bond with ABSA. It was R10000 or something like that. ABSA did not want to know their story, they were going to Auction her house. My sister, husband and their two young children would have been on the street if you really think about it.

I wonder how many people unnecessarily lost their homes, because the Banks were too slack to make a plan.
My signature, bekdik's quote below, is appropriate in this case.

 

[Leostar]

So can I buy a R 50 million houe and stay after paying only one month insalment?
Ok so they can bump me down to a 25 million shack.
Where do we draw the line?

The line was drawn when absa granted a loen to pensioner that could not afford the bond..and the bank knew it. See another OP today on this.

If your argument holds for banks home loans.. how about a get a car..furniture...clothes..food..booze all on credit.
I have a fundemantal right to those as well.

Sounds like a communist plot to me??

 

[Fudzy]

Yeah you need to protect the reliable payers by punishing the late payers, not getting them into more debt.

 

[noxibox]

The banks bring this on themselves and they do need to be reigned in. The typical scenario in the past was to grab the house shortly after the residents got behind on payments, then sell the house for the bare minimum needed to cover the outstanding amount. They should be hit and hit hard for this kind of behaviour, but the problem is how to do it while preventing them from passing the costs on to customers. One answer might be to hold the decision makers personally responsible as they set company conduct.

The downside of making it more difficult for the banks is that it can make it harder for everyone to get credit. The NCA seems to have had that negative impact.

 

[Shayd]

I am actually in love with the nca, I have so many clients that are buried in debt due to reckless lending by banks.

Yes I know we can argue self control but many of the clients didn't even request this debt. Prior to the nca they would get a call from the bank saying "sir, according to your credit profile we can approve you for X". This is my issue.

Going forward our entire banking system should be more stable due to nca, the trade off is that people are not going to be interest rate sensitive as well. If you have very little debt when interest rates increase, you are barely going to feel it. The reserve bank is going to have a hard time controlling the economy without all that debt.

Sent from my apple stomping, berry crushing droid! Samsung Galaxy S.

 

[noxibox]

I am actually in love with the nca, I have so many clients that are buried in debt due to reckless lending by banks.

I agree. It hurts someone like me because before I could leverage myself more, to my benefit, but there were too many people out there being taken advantage of.

The reserve bank is going to have a hard time controlling the economy without all that debt.

Well the reality is that interest rates had little to no influence on inflation anyway.

 

[CyraxHB]

Regardless of how much credit the banks offer, it is still the customers responsibility to determine if they can afford it or not.

Sent from my Motorola Milestone 2 using MyBroadband Android App

 

[ToxicBunny]

Actually no its not, its the banks responsibility nowadays to determine if they can afford it or not....

Welcome to the world of the NCA

 

[MickeyD]

Regardless of how much credit the banks offer, it is still the customers responsibility to determine if they can afford it or not.

Nope. It is the banks' responsibility to NOT approve loans to persons who cannot afford the repayments.

EDIT: sees B.O.F.H.'S reply...

Note that the case mentioned in the OP has some very specific conditions and that this will not open the door for a free-for-all for folks reneging on their bond repayments.

 

[CyraxHB]

Its moronic for the customer to get no blame if he accepts a loan he knows he can't afford. Banks approve loans based on the financial info given by customers. Theres nothing they can do if the customer exaggerates his income.

 

[MickeyD]

Its moronic for the customer to get no blame if he accepts a loan he knows he can't afford. Banks approve loans based on the financial info given by customers. Theres nothing they can do if the customer exaggerates his income.

Actually there is. If the customer did lie, then the courts would show no leniency when the banks follow due process. The type of ruling granted to the lady in the OP will not be repeated!

 

[CyraxHB]

Due process would be followed after the fact, but because the customer lied initially, he would still have been given a loan he couldn't afford. And the blame lies squarely on his shoulders, not the banks.

 

[MickeyD]

Due process would be followed after the fact, but because the customer lied initially, he would still have been given a loan he couldn't afford. And the blame lies squarely on his shoulders, not the banks.

If he lied, yes.

 

[CyraxHB]

If he lied, yes.

The customer would still know how much he can afford. If he accepts a quote that he can't afford then its his problem.

 

[MickeyD]

The customer would still know how much he can afford. If he accepts a quote that he can't afford then its his problem.

You are assuming a certain level of intelligence...