SECURITIZATION, HOW IT EFFECTS YOU, IN SOUTH

AFRICA

ROLE PLAYERS:1. Borrower-

1. Home Loans2. Motor Vehicle3. Credit Cards, etc.,

2. Financiers:1. Banks – 2. Mortgage Originators

3. Aggregator4. Securities Dealer5. Investor6. Legal

1. Advocates2. Lawyers

7. Judiciary1. Judges2. Magistrates

8. Sherriff

COMMUNITY LIFE

ASSUMPTION -NEW HOME OWNER

Steps1.Look for House2.Make Offer3.Approach Bank4.Mortgage Granted5.Take Occupation6.Pay Rent

HOME BUYERS LOOKING FOR MORTGAGES

Before you have even bought your loan it has been packaged and sold into securitisation

Bank Loans Adviser

Estate Agent takes you to Bank

Special Purpose Investors

Bank is a money making Factory, which is illegal by law, as only the government can make money

CURRENT SITUATION

• Company Retrenches you• Your Business folds• Cant pay premiums• Get into Arrears• Bank Issues Summons• Bank Takes Judgment• Bank Attaches House• Sherriff sell house at sale of Execution• Balance outstanding, Bank still owed monies• Send Sheriff to Repossess your other belongings for

next 30 years

How did this Happen?

• Retrenchment or loss of employment• Business goes Insolvent• Gambled or took a risk• Death or disablement of Bond payer - Uninsured

Alternatives Considered To Rescue the Situation

• Try to borrow more money• Sell House before sale of execution• Put under Debt Counseling• Gamble• Rob a bank – This happens• Suicide – This is a reality

TAKE YOUR HOUSE BACK

STOP THE BANKS THEIR LAWYERS AND

THE SHERIFF

PLEASE RESEARCH THE FOLLOWING WORDS:

1. Home Loans2. Mortgage Originator3. Aggregator4. Securities Dealer5. Investor6. Securitization (2001 to 2008 non SA)7. Special Purpose Vehicle8. Special Purpose Investor

RULES:a) Rule 14b) 18(6) The person claiming he has been injured

must prove injury and c) 18(12) If a party fails to comply then d) Rule 30Ae) Rule 32f) Rule 35g) Rule 37h) In Duplum Rule – Duplication of Payment of

Interesti) Par Dilictum Rule – Dirty Hands Rulej) No Locus Standi – Cannot representk) Section 86 of NCAl) Section 129 and 130 of NCAm) Promissory Note

PLEASE RESEARCH THE FOLLOWING WORDS:

Securitization in South Africa

Home Loans

• Past

Securitization

• Securitisation is the generic term for any kind of Asset- or Receivable-Securitisation. It is derived from the word security, because usually illiquid and sometimes even intangible assets that generate a constant cash flow are formed into a tradable security and are floated on the debt market.

• Securitisation is the conversion of a pool of assets with a regular and predictable cash income, such as mortgage repayments or credit card receivables into a security or marketable instrument. In very basic terms, securitisation enables a company (in most cases a bank) to “sell” a large number of its assets

Securitization continued

• (e.g. mortgage loans), which would otherwise not be attractive as individual purchases, to a specially formed company - the Special Purpose Vehicle (“SPV”). The SPV funds the purchase by issuing debt securities in the capital markets, and the cash flows derived from the asset (such as the mortgage or credit card repayments) will serve as principal and interest payment obligations under the marketable securities. Hence the issued securities are called Asset-Backed Securities (“ABS”).

• Securitisation is the generic term for any kind of Asset- or Receivable-Securitisation. It is derived from the word security, because usually illiquid and sometimes even intangible assets that generate a constant cash flow are formed into a tradable security and are floated on the debt market.

Securitization continued

The Bottom Line

• In a matter of weeks, maybe a month, from the time a mortgage is originated it can become part of a CMO, ABS or CDO deal. Few borrowers realize the extent to which their mortgage is sliced, diced and traded. The end user of a mortgage might be a hedge fund that makes directional interest rate bets or uses leveraged positions to exploit small relational pricing irregularities, or it might be the central bank of a foreign country that likes the credit rating of an agency MBS. On the other hand, it could be an insurance company based in Brussels, that likes the duration and convexity profile of a certain tranche in an ABS, CMO or CDO deal. The secondary mortgage market is huge, liquid and complex with several institutions that all take a slice of the mortgage pie.

Special Purpose Vehicle• 'special purpose institution' means a company incorporated or a trust created society

for the purpose of the implementation of a securitisation scheme;

• In terms of securitisation schemes, the sale of the bank’s assets to the SPV (as a going concern) appears to be a sale of income generating assets, and therefore a sale of part of the business of the seller. This sale may therefore constitute a merger as contemplated in section 12 of the Act. The SPV will, as a result of the sale of the concerned assets, acquire control over a part of the business of the seller, which it did not have prior to the transaction. Where the threshold requirements are met, notification of these transactions would be required. The indication that the SPV has no assets except those acquired as a result of the transaction will be considered in the calculation of the annual turnover or asset values of the firms to the transaction for the purpose of determining the threshold.

• This approach would be a significant step in line with the international trend to exempt these transactions from merger notification. However, the Commission reserves the right to review such transactions, particularly if any competition or public interest concerns arise.

1. The Mortgage Originator

• The mortgage originator is the first company involved in the secondary mortgage market. Mortgage originators consist of banks, mortgage bankers and mortgage brokers. One distinction to note is that banks and mortgage bankers use their own funds to close mortgages and mortgage brokers do not. Mortgage brokers act as independent agents for banks or mortgage bankers. While banks use their traditional sources of funding to close loans, mortgage bankers typically use what is known as a warehouse line of credit to fund loans. Most banks, and nearly all mortgage bankers, quickly sell newly originated mortgages into the secondary market.

2. The Aggregator

• Aggregators are the next company in the line of secondary mortgage market participants. Aggregators are large mortgage originators with ties to Wall Street firms and government-sponsored enterprises (GSEs), like Fannie Mae and Freddie Mac. Aggregators purchase newly originated mortgages from smaller originators, and along with their own originations, form pools of mortgages that they either securitize into private label mortgage-backed securities (by working with Wall Street firms) or form agency MBSs (by working through GSEs). (To learn more about GSEs, see Profit From Mortgage Debt With MBS.)

3. Securities Dealers

• After an MBS has been formed (and sometimes before it is formed, depending upon the type of the MBS), it is sold to a securities dealer. Most Wall Street brokerage firms have MBS trading desks. Dealers do all kinds of creative things with MBS and mortgage whole loans. The end goal is to sell securities to investors. Dealers frequently use MBSs to structure CMO, ABS and CDO deals. These deals can be structured to have different and somewhat definite prepayment characteristics and enhanced credit ratings compared to the underlying MBS or whole loans. Dealers make a spread in the price at which they buy and sell MBS, and look to make arbitrage profits in the way they structure CMO, ABS and CDO deals.

4. Investors• Investors are the end users of mortgages. Foreign

governments, pension funds, insurance companies, banks, GSEs and hedge funds are all big investors in mortgages. MBS, CMOs, ABS and CDOs offer investors a wide range of potential yields based on varying credit quality and interest rate risks.Foreign governments, pension funds, insurance companies and banks typically invest in high-credit rated mortgage products. Certain tranches of the various structured mortgage deals are sought after by these investors for their prepayment and interest rate risk profiles. Hedge funds are typically big investors in low-credit rated mortgage products and structured mortgage products that have greater interest rate risk.

ISSUER ASSETS VALUE (R) ORIGINATOR ARRANGER YEARUnited RMBS 250 million United BS United BS 1989Sasfin AssetSecuritisation

Lease receivables 60 million Sasfin Bank Sasfin Bank 1991

Siltek Trade Receivables 250 Siltek Mettle 2000FirstRand2000-A

Credit Card - FutureFlows

1,8 bn RMB / CSFB FirstRand Bank 2000

RMB CDO 1Limited

CDO 3,9 bn RMB / MorganStanley

RMB 2000

Kiwane CDO 500 million Gensec / JP Morgan Gensec / RealAfrica Durolink

2000

Thekwini I RMBS 1,2 bn JP Morgan / SCMB SA Home Loans 2001RMB CDO 2Limited

CDO 2,9 bn RMB / GoldmanSachs

RMB 2001

Clover Trade Receivables 300 million Clover Danone Mettle 2001Mustek Trade Receivables 250 million Mustek Computers Mettle 2001FRESCO CDO 1,1 bn RMB FirstRand Bank 2002Procul Autoloans 1,3 bn RMB FirstRand Bank 2002OntheCards StoreCard 1,93 bn RMB Edgars 2002Thekwini II RMBS 1,1 bn SCMB SA Home Loans 2002Fintech Lease receivables 630 million Gensec / JP Morgan Fintech 2002PrivateMortgages

RMBS 1 bn Investec Investec PrivateBank

2002

Eagle BondsOne

Aircraft - ECA Guaranteed 1 bn SCMB / Gensec / Imperial Bank Safair LeaseFinance

2003

AutoloanInvestments

Autoloans 1 bn RMB BMW 2003

CARS 1 Autoloans 2,955 bn ABSA Corporate & Merchant ABSA Asset & Vehicle Finance

2003

Thekwini III RMBS 1,5 bn SCMB SA Home Loans 2003PrivateMortgages II

RMBS 1 bn Investec Investec PrivateBank

2003

Autoloan Investments II

Autoloans

1 bn

RMB

BMW FinancialServices

2003

Equipment Rentals Securitisation

Lease receivables

670 million

Sasfin Bank

Sasfin Bank

2003

Workforce Trade Receivables 50 million Mettle 2003

Clover II Trade Receivables 100 million Clover Danone Mettle 2003

SOME OF THE COMPANIES BUYING YOUR DEBT

CURRENT SITUATION

This means

• Banks are Committing Fraud:

1. Do not have our permission to sell your debt2. Lawyers have no locus standi, they do not represent the party

owning the debt 3. There is no contract between you and this debt collector, but

they will make it sound like you still owe the original creditor, and they are just collecting on behalf of them no locus standi

4. They have Dirty Hands and thus the Par Dilictum Rule applies

• The Banks are Stealing From Us:

1. My understanding is that when a debt collector (or anyone) buys your debt from the original creditor, that debt is settled. This is coming from the SA Reserve Bank - NewERA has written confirmation from the South African Reserve Bank that, once a bank sells a loan into a securitisation pool, they lose the legal right to that asset

2. Not giving us the profit from the sale3. Taking a monthly installment even though debt paid - In Duplum

rule

4. Claiming twice on a debt –It is illegal for banks to claim more than double the amount loaned from any borrower (the in duplum rule).

This means

Current Situation

• YOUR BOND IS SETTLED• BANK HAS BEEN PAID BY AN INVESTOR

• YOU HAVE NO DEBT

THEREFORE

YOUR DEBT HAS BEEN PAID

HERE IS OUR STORY IN A BRIEF OUTLINE

1. We have been battling ABSA since 2009. Their strategy to try and win by getting default Judgement. They do not want to go to trial. So if they lose at summary Judgement, they withdraw the case and reissue to go for summary Judgement again.a. There have been 3 Cases since 2009

a. Case 1  Case No. 747/09b. Case 2 Case No. 2019/12c. Case 3 Case No. 810/2013

1. ABSA Withdrew the first two cases without serving notice on our Attorney of Record at the time. They Sent a registered slip, so they say to my daughters, yet cant produce slip, no slip, no signatures. This was not done by following correct court procedure

2. On Withdrawing the two of the cases, they did so without tendering costs, which is also contrary to court procedure and court rules.

5. The Banks legal team are not supposed to put information in there documents that they know to be wrong, yet their Advocate and lawyers, who know and admit this is securitisation, do not care. They Perjure themselves the on behalf of Banks by saying a fire destroyed all the documents and copies, including microfilm, yet we have a securitisation letter from ABSA saying it was securitised. Why did their legal team not request the following as we did in our rule 45

a. Proof of Fireb. Witness Reportsc. Photos of fired. Safety Officer Reporte. Police Reportf. Fire station reportg. Auditors Reporth. NCR Reporti. This is a Breach of Archiving’s and Record Keeping Act

6. The ABSA Manger who signed our certificate, which in itself is not a correctly provided certificate, as it does not comply to GAAP principles and the affidavit supplied by the manager has no standing1. Juristic entities, like that of ABSA, whom

authorise employees to dispense and swear to the correctness of averments in an affidavit are to state how it obtained such authority.

2. Sworn Affidavit Invalid. The State President has, in terms of section 10 of the Justice of the Peace and Commissioners of Oaths Act, 1963 (Act 16 of 1963)

7. They are basing their claim on a liquid document, which the court rules say they must provide, but they have stated in their court papers they don’t have them, and that they were burnt in a fire.a. Legislation

i. Rule 14ii. Rule 18 of the Uniform Rules of Courtiii.Rule 32

b. Case Lawi. In the matter of FirstRand Bank Ltd v Beyer 2011

(1) SA 196 (GNP)8. They have admitted to selling it into securitisation, and

therefore have, as per the banking act and securitisation legislation lost ownership of the so called “asset”. Hence their need to say lost in a fire, which is perjury

 

9. Their attitude is extremely Vexatious, wanting to win at all costs a. They are constantly withdrawing and reissuing summonsesb. Keep going for default judgement, then withdrawing when

they loose and reissuingc. By not tendering costs when withdrawingd. Not withdrawing procedurally and correctlye. There is Legislation against this type of attitude