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Friday Dec 21, 2012

Interdict bid to save property owners from bank repossessions

In the Johannesburg High Court today an urgent interdict is due to be heard that, if successful, will stop more than 1 000 consumers from losing their homes, cars and other assets because of non-payment.

The interdict is being launched by an organisation, the New Economic Rights Alliance (NewERA), which is supporting the victims of corporations that put profit before human rights. The interdict is being served on 65 respondents, including all the major banks and special purpose vehicles which trade on "securitisation".

Securitisation is a structured finance process that distributes risk by aggregating assets in a pool.

According to NewERA, companies are used by banks to sell off bundles of loans and then trade these on the bond markets.

NewERA has 140 000 members and it believes a bank may not foreclose on a person's asset if a loan has been securitised.

The organisation says that the SA securitisation market is rampant, with all major banks sharing in an industry worth R30 billion a month.

NewERA said it was difficult to find out from banks which loans had been securitised.

The organisation said its case was based on evidence that tens of thousands of South Africans had unlawfully lost their assets or were about to lose them because of this.

Earlier this year, NewERA member Michael Tellinger launched a case against Standard Bank and the Reserve Bank over a loan.

His case was that banks were manipulative, dishonest, law-breaking profiteers.

His case was dismissed by Judge Jackson Mabesele, who said the case was an abuse of the courts.

Pretoria News

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