WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2008-04-20 Time: 00:00:00 Posted By: Jan
By Clayton Barnes
Banks could soon be forced to make repossessed homes and vehicles more affordable by reducing the prices at which they are selling them.
This follows reports that banks are being forced to manage a growing number of repossessed homes that have failed to find buyers.
Mike Schussler, chief economist at the T-sec Group, says this is mainly due to the economy being in “slow-down mode”.
He told Weekend Argus there had been a pick-up in repossessions and said banks were struggling to sell those properties and assets.
Estimates vary, but Business Day reported on Friday that vehicle repossessions were between 30 percent and 40 percent higher than last year.
Reserve Bank governor Tito Mboweni raised the repo rate by a further 50 basis points 10 days ago, to 11.5 percent.
This was the ninth consecutive increase, and takes the banks’ prime lending rate to 15 percent. The hike came on top of increases in petrol, diesel and food prices, with a big electricity hike still to come.
Schussler said the economy was going through one of its weakest phases yet. Consumers would not buy vehicles and property or create unnecessary debt until prices were much lower.
“This means that banks have to bring the prices of repossessed assets down for them to sell,” he said. “That is likely to happen sooner than anticipated.”
Schussler said there were no “simple solutions” to the problem and the economy would only start stabilising in the next two years.
First National Bank said a growing number of clients were defaulting on payments, resulting in more repossessions. FNB’s head of communications, Xolisa Vapi, said due to inflation the market was not as robust as it had been.
The rise in consumer debt and continuous interest rate hikes were causing a slow-down in demand for residential properties.
“Properties are staying in the market much longer than they usually do. Consumers have become price sensitive.”
Reports indicate that banks are starting to take an easier line on defaulters.
Vapi said instead of repossessing, FNB was looking at ways of assisting clients by restructuring their repayment plans.
Nedbank’s divisional general manager of collections and recoveries, Diana Musara, said if a property could not be sold for the reserve price at the sale in execution, the bank would “buy in” the property. It would then become a “property in possession”.
Once a property is repossessed, the bank as owner would establish the asset’s true value based on sale- ability, condition, state of beneficial occupation and holding cost.
“This value would then determine the estimated selling and market price,” said Musara.
The legal process around repossessions took between four and seven months and properties were sold to individuals or agents based on the first acceptable offer in line with its market value.
“Nedbank’s main focus in legal and collections is to rehabilitate the client rather than take properties to sale in execution, which is the last resort,” she said.