It would have been more professional for the journalist to solicit ABSA’s side of the story as well.
True, but I wouldn’t be surprised if ABSA simply neglected to respond after being approached for comment. After all, the bank had already done just that a few months ago when it put its true colours on display by auctioning off a repossessed R200,000 home for the princely sum of R1,000.
'Luthon64
methinks some corrupt w/banker sees an opportunity to make some money off these auctions: R200000 for R1000 FFS!: who bought it and then resold it and in addition organised a bond for full amount again.
I have been to these repossessed property auctions. The bank has its own representative there to bid on the auction in order to ensure that the property does not get sold for too little to someone else. What must have happened in this instance is that nobody turned up for the auction except the bank’s own representative. Starting at R 1 000 with no counter bid, it would then have been knocked down to the highest bidder, who would have been the bank itself, at R 1 000. Who bought the property? ABSA. It may sound heartless, but they are acting within the law here. It is interesting to note that in the US the shortfall on a housing bond is regarded has written off in the event of a repossession. That is part of the reason why US banks ran into trouble with sub-prime housing loans in 2008. Perhaps SA law should be changed accordingly.
Er, there’s usually a reserve on fixed property (meaning that if a certain minimum bid is not realised, the auctioned lot is not actually sold). If ABSA failed to set a reserve and then proceeded to buy a property at auction to which it already had full legal title, then there’s something very obviously fishy going on.
(I’m ignoring the allegations brought in the Western Cape High Court against Auction Alliance about collusion and kickbacks, as published recently in the Argus. More importantly, the SA Registrar of Banks has affirmed in writing that a bank loses legal standing over any assets it transfers into Special Purpose Vehicles. That is, the bank forfeits all legal claims regarding the bonded property when it securitises a mortgage loan. If ABSA securitised the home loans before repossessing the properties in either or both of the above cases, the bank is guilty of nothing less than fraud and intimidation through misrepresentation, of which it may not even be aware. Not that that would be any excuse, and this whole murky issue will be clarified in the High Court very soon.)
'Luthon64
The way I understand it, these would be “attached” rather than “repossessed” properties. The bank obtains a court order for the sheriff to attach the property. The bank’s lawyers place a classified legal notice in the newspaper and the sheriff then auctions the property and reimburses the bank/creditor(s). The bank cannot put a reserve price on it, but may compete in the auction. It differs from voluntary auctions where a private auctioneer is involved and the seller can set a reserve price or can opt to reject the highest bid.
So, ABSA no more… not unexpected.
http://www.fin24.com/Companies/Financial-Services/Absa-to-buy-Barclays-Africa-for-R18bn-20121206