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Banks unfazed by property rip-off

Jun 22 2009 08:47 Nellie Brand-Jonker

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Cape Town - The banks that advanced 88 home loans to low-income members of the Waterkloof Air Force Base in an alleged property scam are shrugging their shoulders as to whose problem it is.

Members of the Air Force embroiled in the alleged property swindle will approach the banking ombudsman on Monday to request an investigation. They believe the banks were remiss in doing their homework before approving the bonds via a bond originator.

The National Credit Regulator is already investigating both the banks' granting of the loans and whether the Credit Act has been violated.

Sake24 previously reported that about 35 people had been caught up in the alleged property fiddle by the Centurion companies JV Advanced and CH Bond Originating, which are owned by Jonathan Vreugdenburg and his mother, Christine Harrod.

These citizens are now saddled with R35m-odd in debt after the Vreugdenburg party defaulted on the bonds, which they had ostensibly agreed to pay themselves.

The property scheme involved the Air Force members applying for mortgage loans to buy erven in Hestea Park in Pretoria. Harrod's mortgage originator, CH Bond Originating, handled the applications.

Once the applications were approved, the applicant would receive R20 000 and Vreugdenburg would pay the instalments. The Vreugdenburg party would purportedly receive the profit on the resale of the property.

But the Vreugdenburgs have made no payments since January.

Absa granted 27, Nedbank 32, and Standard Bank 25 home loans to the 35 clients.

Danny da Silva, one of the purchasers, wrote to the banking ombudsman, saying, "The investors were under the impression that the banks and JV Advanced had come to an agreement to meet the payments on our behalf because the loans had so easily been approved". Before this arrangement many had been unable to obtain loans.

Absa and Nedbank responded to enquiries by saying the issue was under investigation. Absa said the bond originator had not had a contract with the bank.

Standard Bank and Nedbank maintained that proper procedures had been followed in granting the loans. Standard Bank referred further enquiries to the bond originator and the sellers of the properties.

First National Bank has not yet been approached for comment.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

 
 
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