NCR Seek Declaratory Order
The National Credit Regulator (NCR) appeared at parliament before the trade and industry committee this week to discuss their looming court application in the Gauteng High Court in regard to shortfalls on auctions.
The NCR say that the National Credit Act does not give enough clarity on the obligations of credit providers in regard to auctions. There have been a recent spate of complaints by consumers in regard to having their homes sold on auction for ridiculously low prices leaving them with a massive shortfall which the banks then demand that they pay. NCR CEO Nomsa Motshegare told the committee that a minimum reserve might be a step in the right direction. The NCR hope that the declaratory order will help reduce abuse and huge burdens being placed on already burdened consumers who have in most cases just lost their homes.
BASA Say Auctions Seldom Used
BASA have been quoted as saying that they wish the NCR had come and tried to deal directly with them on this matter as their members seldom use this option and they would have preferred to talk about it before the matter went to court. The results of the court application could have a massive impact on how auctions are conducted and how much debt consumers are left with after such a sale in execution.
A declaratory order has the full force of law and would be binding on all parties. At present the NCA simply says that the asset should be sold in the shortest possible times for a fair price but give no indication of how this price would be fair and how it might in any way relate to “market value”.