Busted! Joburg man catches Standard Bank out over mortgage loan securitisation denial
Standard Bank involved in securitisation
Sometimes the banks just can’t get it right. Here’s a case where Standard Bank’s legal department flatly denied a customer’s mortgage loan had been securitised, while another department in the same bank sent proof that the loan had in fact been sold to an entirely different legal entity.
Busted. That’s what happens when the left hand doesn’t know what the right hand is doing.
What makes this case even more interesting is that the customer, Jack Darier of Parkhurst in Johannesburg, does not have a judgment against his name, nor is his house under threat of being repossessed. He just wanted to know if his home loan had been securitised – in other words, on-sold by the bank to a new owner. That means the bank no longer has legal standing to bring action against the customer in the event of default. You can see below how the banks get around this – it’s a simple cession, they argue successfully in our brain dead courts.
http://www.acts.co.za/news/blog/2015/11/busted-joburg-man-catches-standard-bank-out-over-securitisation-denial
Auction Alliance’s network of dubious allies
Auction Alliance
IN THE dying days of December 2011, billionaire heiress Wendy Appelbaum decided to add another wine farm to her property portfolio when she bid for Dave King’s liquidated Quoin Rock farm. But she was hoodwinked on the auction floor by Rael Levitt, of Auction Alliance, who attempted to drive up the bids by placing a phony bidder in her path. Appelbaum became wise to him and over the course of the next few weeks, she attracted considerable attention to the attempted fraud.
The media then moved in and began to dig around Levitt and the firm he had started in the mid-1990s. In the middle of February 2012, a newspaper report that Levitt attempted, unsuccessfully, to interdict, exposed years of dodgy dealings that linked bank staff, liquidators and attorneys to a money-making racket, allegedly orchestrated by Levitt and Auction Alliance.
http://www.bdlive.co.za/companies/2016/05/13/auction-alliances-network-of-dubious-allies
Nomsa Nkata v FirstRand Bank Limited and Others
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- https://problembond.co.za/wp-content/uploads/2016/04/CCT-73-15-Nkata-v-First-Rand-Bank-Limited-and-Others-Judgment-media-su1.pdf
- https://problembond.co.za/court-case-nkata-v-firstrand-bank-limited-zawchc-1/
- http://www.saflii.org/za/cases/ZASCA/2015/44.html
- http://www.seri-sa.org/index.php/19-litigation/case-entries/434-nomsa-nkata-v-first-rand-bank-limited-and-others-nkata
- http://www.jordaanattorneys.co.za/Court-Cases/Firstrand-Bank-Limited-v-Nkata/
- http://domainatricks.co.za/seri/index.php?option=com_content&view=article&id=434:nomsa-nkata-v-first-rand-bank-limited-and-others-nkata&catid=19&Itemid=41
Victims of invalid garnishee orders cash in welcome Xmas gift
After months of perseverance, the University of Stellenbosch Legal Aid Clinic secured refunds for all 15 of its hard-pressed clients who were at the center of last year’s court battle over emolument attachment orders.
The money was paid back in the weeks before the Christmas holidays, providing much-needed relief for the applicants.
“Although it was the subject of a court order issued in July, our clients were only refunded a few weeks ago,” said Mathilda Rosslee of the legal.
Reserve Bank should act on Absa’s interest mistakes
THE South African Reserve Bank seems to have little appetite to deal with the miscalculation of interest rates by Absa. The bank has been paying back its customers millions of rand because it overcharged them on their credit cards. I am told more than 50,000 clients were affected, with one client due a R90,000 refund.
One would have expected the Reserve Bank to move swiftly and assess how deep this goes. But the central bank’s response is that “in terms of section 33 of the South African Reserve Bank Act, (it) does not comment on individual entities. Complaints on interest rate charges are referred to the banking ombudsman as the (Reserve Bank), in terms of the Banks Act, does not have the legal powers to intervene between a bank and its client.”
I think the Reserve Bank is reading the act too narrowly. It does not know how widespread this problem is and immediately concludes that it should not intervene. What if it is widespread and affects other banks?
A few years ago, Absa miscalculated interest on a client’s car loan. A senior Reserve Bank official said — and I have it on record — that it was an “isolated incident”. I guess he was wrong, because it has happened again with another Absa lending product.
A miscalculation of interest can pose a risk to SA’s banking system. Imagine if a bank had overcharged clients interest to the tune of R2bn and these clients were suing to get their money back. This would be a problem for the bank as R2bn is a lot of cash.
Dealing with interest miscalculation should not be restricted to the National Credit Regulator and the banking ombudsman. The Reserve Bank is tasked with promoting the soundness of SA’s banking system, and should take on this battle.
Speaking of battles, all because of brinkmanship, about R500m owed to five large South African banks is now at risk and may not be fully recovered should there be a failure to sell African Bank Investments Limited (Abil) subsidiary Standard & General Insurance (Stangen). If other creditors are included, the sum owed to creditors is close to R1bn. Should Abil’s business rescue fail and a liquidation is granted, the biggest losers will be the creditors, including the banks.
The parties involved include Abil’s black economic empowerment (BEE) shareholders, business rescue practitioners and African Bank curator Tom Winterboer. Last week Winterboer, under pressure to create a “good bank” from Abil by February, walked away from acquiring Stangen.
Winterboer had offered R1.38bn for Stangen, but Abil’s BEE shareholders, Hlumisa and Eyomhlaba, thought they were being fleeced as Stangen produced half-year profits of R786m. The shareholders wanted at least R4bn for Stangen to recover something of the R1.5bn they had lost over the past nine years.
The sale of Stangen would have realised about R2.6bn for Abil shareholders if cash at Stangen is taken into consideration. The BEE shareholders, although they believe they are not the spoilers, essentially torpedoed the deal. They knew they stood to get nothing from Stangen and decided to play hard ball. Essentially, close to R1bn would have gone to the creditors and another R1.3bn would have gone to preference shareholders.
However, it seems that the parties who wanted the Stangen deal to go through for R1.38bn underestimated the hand of the BEE shareholders. Because Hlumisa and Eyomhlaba had already lost R1.5bn, they felt business rescue was aimed at helping creditors rather than ordinary shareholders.
Winterboer is not a loser. But the African Bank “good bank” has lost out on making close to R1bn in capital in the first two years, which is what Stangen was expected to bring in.
In Winterboer’s words: “The capital expectation over the first two years was a R955m contribution through recapitalisation of the bank. After taking account of other impacts of not needing to fund the acquisition of Stangen, the actual capital reduction is of the order of R640m, which will be compensated by the good bank taking a larger amount of cash across from the existing African Bank.”
Winterboer felt it was better to make an arrangement with another insurer to underwrite the unsecured loans advanced by African Bank, as he could not afford delays. That is his choice. He could not be forced to buy something he felt was too expensive.
http://www.bdlive.co.za/opinion/columnists/2015/10/20/reserve-bank-should-act-on-absas-interest-mistakes