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The Banks Have Failed Us! — 9 Comments

  1. Has anyone ever bothered to question the system used in banking called securitization ? This is the other magic trick that banks perform where they give out home loans to people, charge monthly fees for this and when one fine recession morning, it is discovered that the home owner no longer is able to pay their loan amount, promptly take away the asset that has been paid for for the pat 10 years. Well Let us start by asking this question – Who’s money is it really that the bank is using to provide that loan ? In effect banks do not have any money – they use other peoples money and charge a brokerage fee for performing the transactions – they securitize the loan against the asset being bought, negotiate and sign an agreement to provide the service , but in essence they never give you “their” money ! So if the truth be known, they do not have any right or title to the asset that was bought. The people who “loaned” the bank the money are the real owners of the asset. So if this is true, how can a bank ever recall or repossess anything that they have financed ? The ANSWER IS : They cannot. So now, just try and get any legal eagle to take that challenge on. They all (well most of them) earn the majority of their money from banks, municipalities, and other large corporates, so they are hesitant to kill the golden goose. I recently called for the bank to show me documents on how my home loan had been established to determine if it was securitized. Do you think they rushed back to show the documents ? Well a year later I am about to lose my home as the economy has made the bond of R 14000.00 per month totally unaffordable, and I still am waiting for any reply from the Standard bank . I have had the threatening, harassing calls, the legal notices telling me of their intended actions, the notices of and actual sale in execution of their property…and now am at the point where I am awaiting the official eviction notice from my primary residence….and still not response on any of my requests for sight of the documents proving the authenticity of their claim that they own my home. I would like anyone who has ever has a car, boast, bike or home repossessed to think about this and then do a lot of reading on how money is created – ala your article above, and then start standing up to these FINANCIAL BULLIES. They do not have all the rights they proport to, so challenge them and let them crash and burn !!
    Ever wondered why bankers sounds so much like …well you can do the rhyming.

    • Dave, that’s terrible to hear! I don’t know much on the topic but securitization and credit derivatives/swops are the reason for the world recession. We heard continuously how SA banks never ran the same risk as their US and Euro counterparts but jaded me finds that unlikely. You bringing this up is proof.

      For those who are reading this and don’t know what securitization is, it’s when banks can bundle different kinds of debts into one package and resell them to investors (did i get that right, Dave?). It’s a crazy practice because, for example, packaging 1000 mortgages and a 1000 cars into one product to resell doesn’t allow anyone to estimate risk. Insurance, alone, is a nightmare (for example, in the US home crash, you could insure these packages even though you didn’t own them – how the hell can a company make a profit off insurance on a house that they don’t own???).

      What it boils down to is that banks, insurance companies and stockbrokers make up names such as “mortgage-backed securities” which no one really understands yet accepts as normal – it’s not normal. If you buy a house through a credit deal with a bank, the moral transaction should only be between you and the bank! Instead, hundreds could be involved. These illegal practices have essentially made slaves of homeowners whilst pricing houses out of reach of the common man e.g. an average house in Knysna would require the buyer to earn R25 000 p/m (this can be combined with his wife’s). How many people do you know in Knysna who earn that? It’s unlikely that i, or anyone i know, will own a house (especially when you can rent a house with a R14 000 bond for R5000 – something has gone radically wrong!).

    • The sad and ugly fact is that he who normally has the most money wins. In your case, the bank. The only option is to file a lawsuit but that may not be financially liable. However, it could give you time to find others in the same situation (not easy but if you figure out how there will undoubtedly be many). South Africans, especially Knysnians, are generally unprepared to fight what’s wrong but a blanket lawsuit would lessen costs for all, make the bid stronger, and possibly set a precedent for our country.

      Excuse me if i sound like i’m on a platform or hijacking the topic but the world is in crisis, We are in crisis. Personally, i don’t know if i’ll survive another month. The public should stop hiding or dealing with the powers-that-be in half measures. There are too many questions that need answering. And the Knysna municipality and it’s councillors are suppose to be serving our interests, not theirs. Topics such as yours should be looked into by them. If they motivated themselves towards public good, they would have far more clout than a few members of the public.

  2. Hi Again, well on the grouping together thing, maybe a little slow in Knysna, but there is a group of people who have formed a “company” called the new economic rights association, ( http://www.thenewera.org.za) who are fighting just this. They all have been aggrieved in some form or another by banks and all have been resrarching and challenging the banks, reserve bank, ombudsman for banking, human rights council and many others on the ethics of the banking practices, and even better their total disregard and contempt for those they have snarred into their money trap. They offer guidance and suggestions and will assist with getting together a “combined” awareness ofthe problems being experienced by so many and hope that justice will prevail – and I presonally hope that we see a few banks collapsing into crumpled heaps pleading for forgiveness. Where, however, have you ever seen any institution run by lawyers and accountants havinf compassion for the “small guy”. Lets switch track here a little. How many little guys have been hurt with things like furniture contracts, where theyt end up paying double the purchase price for the stuff they buy. Another problem here is the this stuff is probably in tatters by the time they have paid off half of their debt…do the banks with a furniture store attached care ? Well I am sure that one calls for no answer !

    If anyone cares they can look up the New ERA and see what they are doing. I finally managed to scrape together the +/-R 500.00 rand in order to receive all the documents to proceed with the flurry of paperwork required to make me a pain in the banking butte.

    I think that if more of us, who sit in our homes (or cars) thinking that it is shamefull and degrading, what is happening to us, and that we cannot make public that it is not a crime or a reason to feel embarrassed (unless you have deliberately caused your own demise, naturally) stand up and challenge the system, then we wil start to get back our dignity and slowly start growing our wealth again.

    Perhaps this may not be measured in notes and coins excluisively but when you are in the straits that many of us in Knysna are currently in, one measures their wealth in the true form, by the friends and collegues and more importantly the family, who stand alongside you through all of the trials and hardships.

    Lastly, I say, start building your own independance in simple ways, like growing your own veggies and fruit. Capturing your own water, and if you can afford it, become independant from the big corporates and get your own naturally powered energy. Also stop buying Chinese from the mega stores, support your own local crafters and entrepreneurs so that the money microcosmic economy of Knysna can begin to grow. Don’t let the money leak out of the pot to Cape Town and Johannesburg if there are local equivalents.

    • It’s fantastic to know that something has started. Did you receive all the info satisfactorily? I ask because the web url never worked but i did find a one-page sign-up elsewhere. Since there was no way to contact them i returned to Google and found the owner under another website. Unfortunately, the contact page on the other site, http://www.truth24.co.za, doesn’t work. Do you have an email for Scott? My goal is to get more information. Additionally, i’m willing to build them a site at charity rates within 3 days if all is legit.

      There is certainly shame and guilt. I hear crisis after crisis story. A mate of mine had a seizure the other day which was most likely caused by stress. He’s very qualified but there’s no work in the building industry. My neighbours got robbed for the 8th time (when i last mentioned it on this blog, it was at 7), the costs removing their profits for the year. I borrowed rent (again) and don’t know if i will be able to do so again. A pensioner who used to live in my road now lives in a storage shed. I mention all of these because more of us have something in common than ever before.

      I don’t know a solution but buying local, as much as i believe in it, is like putting a band-aid on an amputation. Not to mention that money talks. Small business is vanishing rapidly and being replaced by national brands (the only ones who can afford the out-of-town rent rates).

      I believe in truth which encompasses real value. Most people have by now realized that they have hardly any friends or none. It’s become a regular topic of conversation with people i know. No matter the circumstances, real value is good because it lets everyone know who you/we are.

    • Thanks. That is the one i found but it has no info, just a subscription. Scott is the owner. When he responds, i’ll be sure to pass on any extra info.

  3. Just a bit more salt into the wounds. Have heard that there are people who we believe are all sooo well off living off sale of assets, baked beans and toast or soup and toast, just so they don’t have to be seen as being in the proverbial they pretend that all is ok, they go out in public with brave faces and say “We are doing great !”

    Well have a look at the bank repo websites (ALL OF THEM ) and tell me what the banks are going to do with those thousands of houses they now “own”. Are they now going to damage the mortgage industry by becoming rental agencies, or are they eventually just going to dump homes onto the market at well below real value to get some money back to keep their shareholders happy ?

    I also was wondering if they are paying the rates and taxes on the properties they are repossessing because if they are not, I have another question for the councils on the sustainability of this ever increasing burdeon ! Also the pre-paid electricity or availability fees – are they being covered ?

    Well just some more thoughts…

    • I should get you to write the next blog:)

      I know of more people suffering than not. Despite keeping up appearances, an easy tell-tale sign is the little-to-spare’s spending habits in restaurants. Coffee replaces sandwiches and sandwiches replace steaks. It’s downscale. Then there was the return of the story of an old lady eating cat food (unverified). I met someone who used to be rich and his family of 4 was living in the spare room of a friend (i admire that cause they did what was necessary until moving on).

      People need to adjust their mindset. It may not be nice but you can survive on R100 worth of food monthly. I’ve done it, unfortunately, several times. If faced with an economic challenge, fuck pretense and just do whatever you need to do (otherwise it will only inflate the problem over time).

      It’s not easy getting informative responses from the Knysna municipality, provincial government, banks etc. We do need to know what’s happening with regards rates in Knysna. I’ve heard from 2 people that the majority of properties at our biggest holiday home area are up for sale. That a nearby estate agent is moving away says a lot i.e. houses on sale at reduced prices but no buyers. That type of situation leads to no rates…and a big chunk of Knysna’s income comes from those outsiders who invested here. On the other side of the spectrum, i doubt that RDP houses equate to much in rates. It’s a lose-lose scenario.

      The municipality will be battling for budget. I caught our Acting Municipal manager out in a lie regarding millions. It’s ridiculous that they still paint the glossy picture for Tourism’s sake. We’re beyond that. Rather admit the real situation and tell us what can or can’t be saved and then we build from there. The public will eventually revolt unless a sobering education is begun asap.