Real Estate Investor Magazine South Africa May 2013 | Page 18

COVER STORY
She notes that from a debt counsellor’s
perspective, securitisation has huge implications,
as the counsellor needs to know who the debt
belongs to, to ensure negotiations and payments.
“If we do not know who the real owner of the
debt is, how can we make a judgement call on the
outstanding ownership of the debt?”
In terms of the effect of securitisation on the
debt counselling process, Solomon says that it
could mean that a credit agreement is illegal.
“If the ownership of the debt shifts, it could
mean the banks have no legal status over the
debt, because they do not own the debt. The
new holder or owner of the debt would also
need to be a registered credit provider in terms
of the NCA. Of course, a debt counsellor
would look at the debt differently if they

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May 2013 SA Real Estate Investor

knew it was securitised and would question
the legality of the action on behalf of the
consumer.”
Solomon further notes that consumers
absolutely have the right to know if their
loan has been securitised. “If the bank has
securitised a debt, made money from your
signature without your consent or knowledge,
and then try to take legal action against you
should you default on the loan, it is 100% your
right as a consumer to know this. Maybe this
could be the reason why the banks have not
embraced the NCA or tried to window dress
the debt counselling process, because they
know that should the truth be revealed, they
could stand to lose more than what they are
currently worth.”

So what to do?
How do these issues impact ordinary South
Africans? And what can we do about it?

1. Get informed
Firstly, we need to realise that we ordinary South
Africans don’t know what is really going on.
The “money” in the financial system is no longer
backed gold reserves, nor are deposits in the bank
held safely in a vault. “Money” is little more than
electronic bookkeeping entries based on “promises
to pay”.
It is up to us to demand and ensure that our
financial system operates on sound principles. As
the people of Cyprus just discovered, relying on
government or the financial authorities in a country
to monitor and maintain the system responsibly, can

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