NewERA Lawyers Obtain Promising Decision for Distressed Homeowners
This morning [30/1/2012] in the Western Cape High Court (Case number 19252/2012), Judge Delamo granted a landmark postponement in favour of a homeowner, Mr Mc Epieuw. This postponement was sought specifically to ensure that documents pertaining to the securitisation of Mr Mc Epieuw's home loan would be disclosed by ABSA bank.
Previously, the attorney for Mr Mc Epieuw, Quintin Zimmermann, had twice requested documents from ABSA, but the bank was not forthcoming. This compelled Zimmermann to appear in Court and ask for a further postponement to allow more time for the bank to produce the documents. Upon considering the papers, Judge Delamo agreed that Mr Mc Epieuw's matter had merit which warranted a postponement to allow for the proper ventilation of the issues pertaining to the home loan and securitisation.
The New Economic Rights Alliance (NewERA), a consumer advocacy group who is attempting to prove that securitised loans cannot be foreclosed upon, is pleased with this decision. Scott Cundill, Chairman for the NewERA, stated:
"After almost of two years of trying to bring transparency to the banking sector, we have achieved a milestone. A High Court Judge has commented that securitisation could affect the legal standing of a bank's right to foreclose."
Interestingly, the affidavit filed by Zimmermann made reference to a fire which apparently destroyed the original documents pertaining to Mc Epieuw's home loan. This was why ABSA was unable to produce the original loan agreements on request. When the fire department was contacted, they stated that the back-ups and certified copies were not destroyed in the fire, leaving no reason why the bank could not produce valid documents.
In cases of securitisation, bundles of contracts are sold by the bank to a third party who trade them on the stock exchange and bond markets. The bank has been paid out, so NewERA argues that they no longer have a right to the contract. The whereabouts of approximately R1 trillion of securitised contracts is therefore something that the group would very much like the banks to disclose.
Earlier this month, a US court awarded home owners US$8.5 billion in compensation involving issues very similar to that which NewERA is advocating. [source: http://www.bbc.co.uk/news/business-20935095].
Furthermore, Court cases whereby MERS (the electronic process of securitisation) has been declared illegal in several US states clearly has implications here in South Africa as the principle of securitisation is standard across nations.
NewERA agrees that this milestone is only one of many on their road to bring relief to a population under an immense burden of debt. They are due to appear in Court on March 19th, having sued the major banks and the South African Reserve Bank to declare securitisation, and other South African banking practices, unconstitutional.
Contacts: Quintin Zimmermann: 083-651-6115 / Robyn Zimmermann: 074-189-7495.
Additional research: Last week, on January 22nd, the major US News Show "Frontline" blew the lid on some of the fraud involved in the US. You can watch the entire program here: http://www.youtube.com/watch?v=qRHbH_Izt1M.