New law to embed expropriation without compensation into Constitution is to be sent to the National Assembly for consideration

Gozado

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Borrowers will still be liable for the full debt on a property, even if the underlying asset has been expropriated at below market value or without compensation. ... These loan agreements remain valid and binding irrespective of the value realised for the property used as security in support of the loan.

Thank you for the link to that article (dated 9th February 2021). As I understand it, the paragraph you quote is one of a list of items called: "BASA’s concerns include:", in other words, these are the aspects of EWC which make the Banking Association of South Africa nervous, and which they would like to find ways to change.

Indeed, the next point includes:
  • Any legislation that threatens the repayment of loans owing to banks will undermine a critical sector of the economy and put depositor’s funds at risk.
and the next:
  • If the value of land is reduced by expropriation to nil compensation, or at below market value, banks will have reduced capital against which to extend credit for entrepreneurs and personal development. They will have to adopt more conservative loan policies, which will affect all credit extension, not just property.

For these and the other reasons listed in the article, the EWC legislation will either have to be modified to ensure that the banking sector doesn't go down the drain, or else it will, indeed, crash.

If that latter happens, then even if the property has been redistributed, there will be no banking system in order for any [new] landowner to run a business. Or even if the property all belongs to the government, there will be no banking system left for any international trade. That'd effectively transform South Africa into an island, wouldn't it?
 

John Tempus

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Thank you for the link to that article (dated 9th February 2021). As I understand it, the paragraph you quote is one of a list of items called: "BASA’s concerns include:", in other words, these are the aspects of EWC which make the Banking Association of South Africa nervous, and which they would like to find ways to change.

Indeed, the next point includes:
  • Any legislation that threatens the repayment of loans owing to banks will undermine a critical sector of the economy and put depositor’s funds at risk.
and the next:
  • If the value of land is reduced by expropriation to nil compensation, or at below market value, banks will have reduced capital against which to extend credit for entrepreneurs and personal development. They will have to adopt more conservative loan policies, which will affect all credit extension, not just property.

For these and the other reasons listed in the article, the EWC legislation will either have to be modified to ensure that the banking sector doesn't go down the drain, or else it will, indeed, crash.

If that latter happens, then even if the property has been redistributed, there will be no banking system in order for any [new] landowner to run a business. Or even if the property all belongs to the government, there will be no banking system left for any international trade. That'd effectively transform South Africa into an island, wouldn't it?

Critical part is that the current rule is that they can take your property but you are still liable for the debt.

The point of argument here is not if this will destroy the country, I am simply referencing that this topic is part of the bill and in part they have stated that the original creditor is still liable rather than not stating anything at all.

Banks will have less capital on hand indeed but that would give them even greater reasons to make sure original creditor who just lost their property continue to repay so they have cash on hand. That statement does not eliminate this scenario.

Property going to ZERO also does not remove liability of original loan, creditor still needs to keep repaying that even if the bank cannot sell the house on the market, changes nothing or in fact it makes it even worse for the creditor if the bank gets near zero for the property that just means creditor is liable for even a bigger chunk of the original loan to settle.

No one is arguing that this is such a ridiculous situation and that creditors will default left and right on their loans which in turn will ruin the banks and the creditors at the same time. The important part is that creditors defaulting will be seen like any other default regardless of the situation ie. property just got stolen by the government.
 

Gozado

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If the EWC legislation comes into effect exactly as you describe it, and if the banks themselves cannot come up with a new system that conforms with the law but does not leave its clients at high risk, then the law will dramatically affect those people whose properties are now mortgaged, if, as and when their properties are expropriated.

However, the mechanism - as it becomes known and understood - will, presumably, serve to drastically reduce the demand for new home loans. Many more people will decide that the risk is simply too great, and will choose to rent, instead. That drop in new bond contracts will leave the banks without a significant part of their income.
 

rvZA

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Borrowers will still be liable for the full debt on a property, even if the underlying asset has been expropriated at below market value or without compensation. ... These loan agreements remain valid and binding irrespective of the value realised for the property used as security in support of the loan.



Sorry for not talking k4k. This is South Africa, the obvious stupidity is rarely fake news.

In short, what a funny country we live in. Anyone with a 30 year home loan should be k4kking themself if this goes through.

@rvZA rather shtup if you didn't even bother following the bill they are pushing through (eventually). This is why I stated that the bank were not pushing back too much against this because it made provision for them to still get original creditor to keep paying.


Think of it like this. The banks equate the home loan cash as the credit , you still received the money. In their minds you need to honor the money you received regardless of property that got stolen from you. This is how they get away with forcing creditors to keep paying their loans even if property got stolen by the government. Just because the property were the security for the home loan means nothing to the bank in this bill and thus if this pass its going to be a shtshow of epic proportions.

You are wrong, there is nothing in the act itself making this provision. The banks are relying on this:

......... This is because loan agreements with banks are secured by mortgages over the property. These loan agreements remain valid and binding irrespective of the value realised for the property used as security in support of the loan..........

But, where the banks are mistaken, in your mortgage agreement, there is a paragraph which include the land and any current or future structure built on the land. So, it remains the banks' responsibility to ensure my rights over the land and the structure, else I would never have entered into the agreement, hence the reason for me calling on Force Majeure.

Also, check your bond agreement, nowhere is mention made of EWC. Only expropriation with compensation. They basically covers expropriation with compensation, but wants to wash their hands with no compensation. Ain't going to stand in court, so, bad luck for them.

Banks have been warned by several legal experts this may not hold up in courts.

So, let's wait and see. Even if a court makes such ruling and a person loses his land or property, there is no way the court will ever ensure that the bank will get its money back. And, there will be many thousands of people who will end up this way too.

The banks will fold and there is no other way around it. Best they can do is to make all bonds in SA payable in 30 days and try and get what they still can.
 

John Tempus

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You are wrong, there is nothing in the act itself making this provision. The banks are relying on this:



But, where the banks are mistaken, in your mortgage agreement, there is a paragraph which include the land and any current or future structure built on the land. So, it remains the banks' responsibility to ensure my rights over the land and the structure, else I would never have entered into the agreement, hence the reason for me calling on Force Majeure.

Also, check your bond agreement, nowhere is mention made of EWC. Only expropriation with compensation. They basically covers expropriation with compensation, but wants to wash their hands with no compensation. Ain't going to stand in court, so, bad luck for them.

Banks have been warned by several legal experts this may not hold up in courts.

So, let's wait and see. Even if a court makes such ruling and a person loses his land or property, there is no way the court will ever ensure that the bank will get its money back. And, there will be many thousands of people who will end up this way too.

The banks will fold and there is no other way around it. Best they can do is to make all bonds in SA payable in 30 days and try and get what they still can.

You are wrong. If this bill pass and you have an active loan you will be liable.

My point is not about if the bank will be able to get the money from the creditor but that the creditor would be legally liable for the debt and aside from declaring bankruptcy they will be hunted like with any other unpaid debt.

The banks have been mostly silent and in some aspects even supported the entire expropriation saga and you don't find that at all strange considering they would hold the most debt if these loans just magically become null and void. Not going to happen and the banks know it. Until the bill specifically state that previous debt would be null and void on land theft then it will not be the case, simple as that.

Again let me make the most obvious point clear to you.

If you take out a bank loan to buy a car and you don't have car insurance and the car gets stolen, your loan don't suddenly get null and void at the bank because you don't have a car anymore.

This land theft is no different, the outcome is the same, like it or not.
 

Tman*

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You are wrong. If this bill pass and you have an active loan you will be liable.

My point is not about if the bank will be able to get the money from the creditor but that the creditor would be legally liable for the debt and aside from declaring bankruptcy they will be hunted like with any other unpaid debt.

The banks have been mostly silent and in some aspects even supported the entire expropriation saga and you don't find that at all strange considering they would hold the most debt if these loans just magically become null and void. Not going to happen and the banks know it. Until the bill specifically state that previous debt would be null and void on land theft then it will not be the case, simple as that.

Again let me make the most obvious point clear to you.

If you take out a bank loan to buy a car and you don't have car insurance and the car gets stolen, your loan don't suddenly get null and void at the bank because you don't have a car anymore.

This land theft is no different, the outcome is the same, like it or not.

In theory banks might think that this "loophole" protects them from any liability in the event of EWC, but in practice it simply wont work.

Your typical individual only has X amount of disposable income budgeted for living arrangements.
If you only have R10 000 a month to put a roof over your family's head, will you:

A) decide its better to service debt for a property that was expropriated to keep your credit score green and live on the streets,

or B) Screw your credit score, declare bankruptcy or simply abscond from payments and go rent a place somewhere for R10 000pm?
 

MightyQuin

Not amused...
Joined
Oct 6, 2010
Messages
25,607
I shouldn't be surprised you think black people can't survive on their own.
They can't. They were given Transkei and Ciskei "to survive on their own". They all fukked off the the city to "look for work".

I wonder where these cities came from.... :unsure:
 

Vorastra

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"It'll never get far.", the ANC supporters said, "Don't worry."

They were either idiots or purposefully turned a blind eye.

A country that doesn't respect property rights always turns out well, right guys.
 

Gyre

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They can't. They were given Transkei and Ciskei "to survive on their own". They all fukked off the the city to "look for work".

I wonder where these cities came from.... :unsure:

Who built them?
 

MightyQuin

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You are wrong. If this bill pass and you have an active loan you will be liable.

My point is not about if the bank will be able to get the money from the creditor but that the creditor would be legally liable for the debt and aside from declaring bankruptcy they will be hunted like with any other unpaid debt.

The banks have been mostly silent and in some aspects even supported the entire expropriation saga and you don't find that at all strange considering they would hold the most debt if these loans just magically become null and void. Not going to happen and the banks know it. Until the bill specifically state that previous debt would be null and void on land theft then it will not be the case, simple as that.

Again let me make the most obvious point clear to you.

If you take out a bank loan to buy a car and you don't have car insurance and the car gets stolen, your loan don't suddenly get null and void at the bank because you don't have a car anymore.

This land theft is no different, the outcome is the same, like it or not.
Nonsense...

EWC will be a legal transaction, ensconced in Law. It is not the same as having your car stolen...

If no deed transfer happens, the owner does not have to vacate.

If a deed transfer happens, to the State or the new "owner", the debt is also transferred to their name.
 

azbob

Honorary Master
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Messages
34,498
South Africanstan in the making.

I know I shouldn’t but...explain?


Sweetfokol. One house converted the garage into a spaza shop. Was reported to the municipality - Still fokol happening. Two other houses have signs up "Laundry service".

They expropriated houses and started businesses from them?
 

Gyre

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Oct 16, 2011
Messages
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Just seems like you implied only certain groups should be in the cities, when other groups were used as cheap and disposable labor to build these cities quickly.

People naturally gravitate towards where the money is, do we blame expats for leaving SA? Why would we blame someone for leaving a province then?
 

HunterNW

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They expropriated houses and started businesses from them?
Yip. Free water and electricity.
Should see what it looks like infront of the spaza shop. Just litter everywhere.
 

MightyQuin

Not amused...
Joined
Oct 6, 2010
Messages
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Just seems like you implied only certain groups should be in the cities, when other groups were used as cheap and disposable labor to build these cities quickly.

People naturally gravitate towards where the money is, do we blame expats for leaving SA? Why would we blame someone for leaving a province then?
Are you missing the point on purpose?

"seems like you implied..." jirre, really...is this where things are headed now during "debate"?

Go read the post I responded to AGAIN and then read my response AGAIN.

Your response has absolutely nothing to do with the above...
 

HunterNW

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Your council doesn't cut off non-payers?
They do. But.... we have an anc council. these okes have people inside or on the technical team "helping" them.
It's fcking sickening. My neighbor (Pensioner) had problems with his account, cut his electricity the Friday afternoon only to restore on Monday. All these houses they took have taxis parked inside. The police have been called on numerous occasions when they have a pissup and start shooting at each other - fokol happens.
The mine have court cases but..... once these fckers are in, you can't just throw them out.
 

Gyre

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Oct 16, 2011
Messages
3,264
Are you missing the point on purpose?

"seems like you implied..." jirre, really...is this where things are headed now during "debate"?

Go read the post I responded to AGAIN and then read my response AGAIN.

Your response has absolutely nothing to do with the above...

I said seems, you didn't elaborate and posted a picture. I like to think I know you better on this forum(and despite being cranky sometimes, you draw a line at racism). I just wasn't getting your point.

I apologize if I am being frustrating, but without the far-back context(of a couple of messages back) it came out differently.
 
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