Real Estate Investor Magazine South Africa May 2013 | Page 17

UPFRONT
Humbulani Salani, spokesperson for FNB
Legal, simply responded: “We can confirm
that currently FNB does not have any home
loan securitisation outstanding in the market.
When securitisation transactions were entered
into by FNB in the past, it did not breach any
law. Securitisation is an industry matter.”
Steven Barker, Standard Bank’s Head of Home
Loans, replied: “Only a small portion of Standard
Bank’s Home Loans form part of a securisation
arrangement. The customer agrees upfront that
the bank may cede its rights and delegate its
obligations under any loan agreement to a third
party. Where a loan is securitised there is generally
a cession of the rights under the mortgage bond
registered at the Deeds Office. The terms and
conditions of the loan agreement are not affected
by the securitisation and a customer is required
to repay the loan as set out in the loan agreement.
The debt counselling process and any rights
under the National Credit Act is not impacted.
Further, Standard Bank complies with its
reporting requirements under the Act.”

Fu r t he r mor e , A b s a note s t h at “ T he
consumer remains indebted under the loan,
albeit to a different creditor and, save for this,
the terms and conditions of the loan do not
change. The debt counselling process is not
affected by securitisation and the consumer is
still entitled to exercise the rights he/she has
in terms of the National Cred it Act.”
Deborah Solomon, founder of theDCI,
the debt counselling industry portal that
has become the springboard to better debt
management for thousands of overly indebted
consumers, offered a different view.

“The NCR is aware of the process of called
‘securitisation’ and have stated that they are
investigating how this fits into the National
Credit Act. We have also brought the matter of
securitisation to Minister Rob Davies’ attention
and will hopefully get some answers from the
Minister’s office. We have also requested further
information from the NCR regarding the
compliance of the banks in terms of registering
credit agreements that have been sold or traded
with the NCR, but nothing has been forth
coming as yet. In terms of the NCA, the banks
must give the debt counsellors information as per
their request. But the banks all have one ‘template
answer’ and obviously feel that they do not have
to answer these types of questions. It is another
point which we have raised both with the NCR
and with the Minister,” says Solomon.

Absa noted that, currently, their total
residentia l mor tgage book amounts to
approximately R233bn and only about 2% of
this has been securitised. “Worth mentioning
is that the performance of South African
residential mortgaged backed securitisation
transactions have been superior to those in
the US over the last 10 years. This is primarily
due to South Africa’s very well-regulated
securitisation market where transactions
are monitored by the SAR B, the JSE,
international rating agencies and the NCR.
Fitch Ratings recently released a report
confirming that EMEA (Europe, the Middle
East and Africa) residential mortgaged
backed securitisation transactions (from 2000
to 2011) had significantly lower losses than
their US counterparts.”
With regard to the questions about the
consumer’s rights, Absa stated the following:
“The customer will receive a letter from Absa
to advise the customer [in the event] of the
securitisation of the loan and thereafter the
credit provider’s details are ref lected in all
communications to the customer. Usually there
is an express provision for a credit provider to
transfer its rights and obligations. It should be
noted that a credit provider has a common law
right to transfer rights without consent. The
NCA did not remove this right.”
www.reimag.co.za

May 2013 SA Real Estate Investor

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