Absa home loan shocker

Big four bank Absa  (JSE:ASA) has decided to stop clients accessing equity in their bonds, as property prices fall and the bank's cost of holding capital to support unutilised facilities shoots upwards.

Clients will also have to "apply" to get their hands on extra cash that has been held in their home loans.

South Africans have been widely encouraged to plough extra savings into home loans, in order to reduce interest repayments over time. As interest rates for debt are higher than for savings, it has made sense for many people to use their mortgages as a handy savings facility.

Many consumers have also been able to access equity that has built up over time in their properties. Or, re-access capital up to the amount of their original loan.

This week, it emerged that Absa has decided to tighten up on people using their mortgages as a way access extra cash easily. The move has sparked concern among clients.

Absa confirmed to Realestateweb.co.za that it has decided to amend its FlexiReserve Comprehensive facility.

Customers "will no longer be able to access the equity in their home loans". If you want this money, you will have to apply and meet various criteria, including of the National Credit Act.

Absa said that customers who have been paying additional money, over and above required home loan amounts, can access their savings by applying and filling in a form.

The bank said it has sent letters to its clients and that amendments to the facility have been staggered and take place between 15 October and 24 November.

The bank sent a "holding statement" about the matter shortly before the close of business on 14 October.

Absa home loans managing executive Luthando Vutula told Realestateweb.co.za there is some misinformation doing the rounds about the latest decision by the bank.

He said clients will still have access to pre-paid amounts - the only difference is you will have to apply. He said it would take about 24 hours to access these funds. Re-paid capital would be regarded as equity.

Accessing equity is another matter and will be based on whether you can afford to repay the money, not the asset value. That process will be in line with the onerous National Credit Act (NCA).

Vutula said falling residential property prices were a major consideration in the decision - and even though Absa's house price index is still in positive, albeit low, terrain.

"The reality is property prices have gone down in the last six months. Compare the return of about 1,6% to the 20/25% we used to enjoy," said Vutula.

In the statement, Absa said the reason it decided to amend the facility was because of the "decline in property values over the past six months".

"The bank felt that allowing access to the original loan granted without a validation of the property's value increased the risk for both the customer and Absa." It said it believes this amendment will prevent customers from "going further into debt" and putting their homes into jeopardy.

Absa said a factor in the decision has also been "the substantial increase in the cost of holding capital to support all unutilised facilities".

"This means that customers will no longer be able to access the equity in their home loans via the FlexiReserve Comprehensive option as they have done in the past," it said.

An alternative option for customers with no advance or prepaid amount, who would like to access the difference between the outstanding balance and original loan amount granted, is to apply for a re-advance "which is subject to the normal credit and pricing criteria".

"If a customer's home is worth more than the value of the home loan they took, the customer may apply to increase the value of the loan amount. This is a further re-advance option and normal credit criteria and pricing policy will be applied."

Absa said customers can access advanced/prepaid amounts through various banking channels including internet and cellphone banking or an Absa branch.

Click here to read the full Absa statement.

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Comments

 

responses to this article

Yes, thank you for stopping us spending our own money We can't help ourselves. The sooner banks pull the plug on easy credit, the sooner inflation will drop. The good times are over. by Beulah on October 14 2008, 19:02 Find this comment inappropriate? Report it

Calling Tusci!!! Tusci - Where is your big mouth now bud....? by Gemini on October 14 2008, 19:15 Find this comment inappropriate? Report it

notice that they r not cancelling credit cards because that debt yeilds far higher profits! Banks in SA will always win - the dice is loaded in their favour. by GungetsTuft on October 14 2008, 19:15 Find this comment inappropriate? Report it

Thank goodness! Yay, now those broke home-"owners" will need to put their ill gotten gains for sale to cash out. Whereas previously loose lending choked supply and drove prices insanely higher, and this fed back into home equity, causing people to hold onto their . .more properties, since they could be used as ATM's. The same forces that pushed prices into unaffordable territory, work just as well in reverse. Expect more price drops. . .less by Duh! on October 14 2008, 19:18 Find this comment inappropriate? Report it

FNB same I have a bond with ABSA and FNB. Two months ago i had the same problem with FNB. I put some money into the access bond - which was to pay my taxes later on. When i wanted to use it to pay taxes, FNB refused me access, which caused big SARS problems for . .more me. One month of fighting and thread of legal actions (theft) and they gave me access to my own money. Withdrew all extra money from my bonds. ABSA has been doing for longer on an unoffical base!!! . .less by PeterM on October 14 2008, 20:00 Find this comment inappropriate? Report it

Reading between the lines "The bank felt that allowing access to the original loan granted without a validation of the property's value increased the risk for both the customer and Absa." What exactly are they saying here, that they issued loans irresponsibly, i.e. for . .more more than the value of the secured asset? If so then I am afraid this is an indictment of their mismanaging their loan function. Or is Barclays perhaps putting pressure on them to tighten up in expectation of trouble ahead. That would be very ominous. Or, knowing banks and their propensity to squeeze their customers for every penny in the way of fees etc it is perhaps just a case of cost cutting; "Absa said a factor in the decision has also been "the substantial increase in the cost of holding capital to support all unutilised facilities"." I would tend to go with the latter. What a bunch of bankers! . .less by Mass debator on October 14 2008, 20:27 Find this comment inappropriate? Report it

Bwa ha ha ha ha ha !!! No surprises here. Things are worse at the banks than what they let people believe it to be. Remember, the fractional reserve banking system requires "confidence". You hear this word touted many times of late. It was Henry Paulson's famous last words as . .more well. The banks and regulators will do everything in there power to try and maintain the public's confidence in the fraud in order to prevent fear and panic which could cause a bank run exposing the fraud. . .less by Freemarketman on October 14 2008, 20:37 Find this comment inappropriate? Report it

The bottom line Tough on those who decided to invest excess funds. Bottom line is the banks have little sympathy or time for their clients. At the coal face it is very difficult and terribly frustrating dealing with some of the gross incompetence that exists - even at . .more managerial level. . .less by Onlooker on October 14 2008, 20:54 Find this comment inappropriate? Report it

Ignoring the obvious I am of course purposefully ignoring the obvious - the spectre of negative equity. Personally if Absa was to tell me the 80% loans I have on property bought through them years ago is no longer sufficient security then I will know we are in great poo. . .more I will join Cj calling a crash of monumental proportions. If my experience of our local banks is anything to go by I sense less ominous motivations, hence I go primarily with cost cutting. Andewa perhaps it is time for me to take some of my business to Nedbank after all. Of course their cutting back on their Flexi whatever makes no difference to the poor buggers who have maxed out on their equity already. They will lose the house in any case. But the rest who have been paying extra into their bonds over time in anticipation of getting their personal costs down will be prejudiced. At a time when they just may well need it. What is that saying about banks and umbrellas? They're always eager to loan you one until it rains. Too true. Gotta love them. . .less by Mass debator on October 14 2008, 20:58 Find this comment inappropriate? Report it

@PeterM Thanks for that Peter - I am in exactly the same situation, holding a few 100k in one of my FNB bonds to pay 07 and 08 tax. I will have a hell of a headache if they freeze that. I think I may just pull it and stick it in the money market in the mean . .more time. FNB did something similar to my accounts a few years after FICA came out - their bungle and it cost me big time. It took over 10 days to clear up, and of course I paid all the fees - to them - for the pleasure of bounced stop orders etc. I believe going postal is the term used when people act out the rage I felt at the time. I have only been banking with them for 25 years. Why would I expect anything better? FNB, "How can we help you?" Bankers. . .less by Mass debator on October 14 2008, 21:10 Find this comment inappropriate? Report it

so, whatever you want to pay extra must rather be invested, (not with the bank though) and when the investment has grown to the bond value, pay the house off. Unless of course you need your money for some emergency at a time when markets crashed because of (some?) bank's doing, in which case you are in the -a-. What a nice "Heads I . .more win, tails you lose" for the banks. Anybody want to join me? Let's start a bank.......... . .less by sa boertjie on October 14 2008, 21:48 Find this comment inappropriate? Report it

What cost? So you want you money and now you must apply..... How long is the form that you have to fill in? or can you just call and say "I apply"? Is there a fee? Do you need three latest bank statements, a utility bill, a certified copy of . .more ID? Once applied for will it then stand? And why does an "unutilised" mortgage advance cost more than zero? Come ABSA put the detail CLEARLY on the table. . .less by Devil in the detail on October 15 2008, 04:29 Find this comment inappropriate? Report it

Another bank I will start looking for another bank that can offer me that service. by Jaco on October 15 2008, 06:18 Find this comment inappropriate? Report it

Different hands of an organisation I am just wondering if Absa Home Loans has shared its view of a "decline in property values over the past six months" with the Absa property analysts. Multiple views seem possible in big organisations. by Pikolian on October 15 2008, 06:26 Find this comment inappropriate? Report it

Banks are desperate Desperate times calls for desperate measures. Your Money! and you have to apply. Not Very Funny! by Kes on October 15 2008, 06:55 Find this comment inappropriate? Report it

RSA Government announces they will assist RSA Banks if they... need to be rescued due to the international economic crisis, this statement was made by the RSA Government and could only have happened after the major banks like ANBA, Standard Bank, Nedbank, FNB, BOE had a meeting with the ra government seeking . .more assistance, they dont want the public to know this as they are scared the public will start panicing and withdrawing their monies, be awared the crisis has struck sa banks they are not safe and protected. . .less by inside-information on October 15 2008, 07:04 Find this comment inappropriate? Report it

Bank value is build on property value The banks own all the porperty, if the property devaules, their homeloans value outstriop the property sell value, you have a problem the system is to ineffeceint to get rid of default propeties, so now your cash flow start drying up, you have a . .more problems, a businsess thats sittig on a asset that devalues, not a good business, thsi is only the start. . .less by Koos on October 15 2008, 07:29 Find this comment inappropriate? Report it

And this is shocking WHY exactly? Property not allowed to go down? Banks not allowed to apply discretion when lending? Or what, dork? by Milkshakes Mshabalala on October 15 2008, 07:30 Find this comment inappropriate? Report it

Certainly shocking if you are an Absa client Like me. I won't be saving in my home loan in a hurry. Maybe Milkshakes this is not shocking if you are an Absa bank manager. Perhaps this is crisis control because Absa seems to have big debt problems on its hands. Look at all those auctions it is . .more doing. Has it made a mistake that it is trying to fix? . .less by Freddie on October 15 2008, 07:52 Find this comment inappropriate? Report it

when markets change business models do too the old model was based on a 25% pa increase in property prices..... by charlie on October 15 2008, 08:02 Find this comment inappropriate? Report it

wanna borrow against equity? well, then you're subject to margin calls if it goes down. that's never been the case in property loans by charlie on October 15 2008, 08:03 Find this comment inappropriate? Report it

@ inside info Interesting... now I wonder if those with savings in the bank have that warm and fuzzy feeling knowing their cash is safe in the banks? by Brennan on October 15 2008, 08:03 Find this comment inappropriate? Report it

Shocker Clever move from the banks. If you deposit savings into your bond (at say 14%), its tax free (effecive return of 14%/0.7 = 20%). The bank has to have reserves to back it up, lent either from clients' fixed deposits at say 7 to 9% or from the SARB at repo . .more of 12% - an easy calc on which profit is the highest. However, if they indirectly force you to save in a fixed deposit at say 8% (effectively 5.6% for you), they borrow money from Peter to lend to Paul and they make 6% and you lose 14.6%. . .less by Nico on October 15 2008, 08:22 Find this comment inappropriate? Report it

I predicted this It seems my genius level is growing, one day I can be just as smug as... I predicted that the banks would start freezing access bonds about 2 months back on another forum. only joking by pointing this out actually.. but true none the . .more less :) . .less by Brennan on October 15 2008, 08:42 Find this comment inappropriate? Report it

F*ck the banks Let's just all remember how these banks treat us now during the tough times and tell them to go F*ck themselves when we're in the pound seats again! by Tsk Tsk on October 15 2008, 08:48 Find this comment inappropriate? Report it

But what about refinancing? The TREOC poephols told me that is the way to go. by anon on October 15 2008, 08:51 Find this comment inappropriate? Report it

Absa lied through their teeth When the subject of Absa removing their Flexi bond facilities for all clients was addressed on Cape Talk a month ago, the question was asked directly to the Absa spokesperson, he replied that it was only for high risk clients and stated that it would not . .more affect non risk clients. Well it just goes to show what a bunch of untrustworthy lying scum Absa are. They should take their own medicine. . .less by Sam on October 15 2008, 09:14 Find this comment inappropriate? Report it

a few thoughts * Does ABSA charge an application fee - my bet is that they do * It is not your money that they are refusing to give back - you are a nett borrower * The introduction many years ago of "access bonds" started the rot we are reaping * Bonds . .more were used as ATMs to finance over the top consumption spending * No real wealth was built up as you borrowed more with each property increase * Now that the tide is receding lets see who has been swimming naked PS: Use Nedbank's "Park-It" account for spare funds @ 11.55% . .less by Vegimite on October 15 2008, 09:19 Find this comment inappropriate? Report it

And so the fun continues Debt will become ever harder to acquire - welcome to the new era - no more borrowing your way out of trouble - I am sure the other SA banks will follow soon. In the UK many mortgage lenders are now insisting on a minimum 15% deposit. No reason not to . .more expect the same here soon. I am sure Absa are scratching their heads as to why their clients' houses have lost 20% value when their index says they have gained 2% :-). And of course, you don't need me to remind you that the harder it is to acquire debt, the more downward pressure there is on house prices. . .less by CJ Says on October 15 2008, 09:21 Find this comment inappropriate? Report it

Paid off bond - insurance remains Well I guess then I have to think to take the trouble of finding another broker. At present my building insurance costs me 2000 p.a., this gets deducted by increasing my loan (my home itself is paid off). I kept some money on it to keep the access bond . .more going, otherwise I must close it and go through the process of opening a new bond, at todays rates. Someone said keep a small positive balance in it, then the bond remains open and move your insurance direct not through commissioned brokers. Don't think though I will buy another property again nor make debt for home improvements - will do by cash. Rest of investments somewhere else, this melt-down crisis will also pass. . .less by Brompot on October 15 2008, 09:25 Find this comment inappropriate? Report it

Flip side side ti the freezed coin Isn't the flip side to this, ABSA's action, that when you've paid in advance, it shud afford you(one) the luxury of missing your monthly payments to the maximum value of what your flexi reserve / flexi bond was(is)? Just a thought! by Supafly on October 15 2008, 09:30 Find this comment inappropriate? Report it

@ tsk tsk very clever to say F***** the banks, but why don't you simply vote with your feet and not use their sevices. let's start with your bank account- avoid all those monthly charges by putting your cash under your mattress. and your mortgage- pay it back and . .more stop borrowing. cut up your cc. . .less by charlie on October 15 2008, 10:25 Find this comment inappropriate? Report it

Depends on type of mortgage held my understanding is that if you hold a 264 type mortgage with absa, this would not affect you but if you hold a 261 you should have to chage it to a 264 in order to have access to your dosh. by Dan on October 15 2008, 10:42 Find this comment inappropriate? Report it

@ inside-information Inside info - that is the biggest load of rubbish. The banks have not had a meeting with Govt. They do not need state support. Their balance sheets are strong and they have no exposure to toxic debt (for once Excon did something good). However, this does . .more not make them immune from market conditions and a global recession. All that this highlights is how inexperienced Mr Phosa is. He is trying to reassure markets, and all he does is put the fear of God into silly people like you. Trevor must be cursing him for implying that our banks are a risk. If everyone removes their savings from banks and puts in under the mattress, then our economy is in the poo, because there will be no funding available for growth. You try buying a house and a car or starting a business when no-one will lend you money. Beware the self-fulfilling prophecy. . .less by cool head required on October 15 2008, 10:53 Find this comment inappropriate? Report it

Paid "in advance" vs Access to cash re: Supafly - it's true that if you've paid extra cash into the bond that you have effectively given yourself breathing-room if you choose to miss some payments and this could well be the option for those who are faced with ABSA's one-sided decision. . .more However, if you've actually reduced your bond to almost zero and use the facility to park funds for other uses, then ABSA's action is a shocker! In all avenues of business life - even with SARS - when a certain activity is seen to be a common "practise", then that activity is usually accepted as the "rule". Hence you find SARS issuing "Practise Notes". If ABSA decided to freeze funds paid in advance in this manner, then they should've contacted ALL their clients and offered them the option to withdraw excess funds BEFORE applying their new "rule". Who the heck wants to go through the process of applying for one's OWN funds via the NCA. Advance payments are voluntary and the original terms of a homeloan contract remain unchanged. If you pay in advance voluntarily, you should be able to withdraw the "advance" funds in the same way - that's become an acceptable "practise" with most banks over time. I would challenge this autocratic move in court - with costs - if I was an ABSA client. . .less by TC on October 15 2008, 10:57 Find this comment inappropriate? Report it

@ tsk tsk Very clever to vote with your feet, but are you suggesting that we go back to the dark ages and a barter economy? Bank service may not be great, but without them we are also pretty buggered, whether we like it or not. Want to buy a house? Well you can . .more save for 20 years first, or get a mortgage. Want to buy a car? Save for 5 years, or get finance. Want to pay all of your bills in cash at the post office or PnP? Be my guest, I prefer direct debits or EFT. Cash under the mattress? That will get stolen pretty quickly by an armed burglar.... Love them or hate them, we need them.... Just find a better bank! . .less by cool head required on October 15 2008, 10:58 Find this comment inappropriate? Report it

Nedbank.......... so if ABSA is doing this then not long till the Big Green Pathetic Money Machine follows - thanks for the headsup Moneyweb, I was going to deposit R120,000 into my bond which i was going to use later on to do extensions - best I keep that capital in my . .more account with Marriott Cash Management! . .less by Gavin on October 15 2008, 11:05 Find this comment inappropriate? Report it

ABSA I have found another bank which offers me that service by Spook on October 15 2008, 11:13 Find this comment inappropriate? Report it

money me think - time ripe to take money out of banks. let them all sink. by dpd on October 15 2008, 11:14 Find this comment inappropriate? Report it

Absa Is Absa not linked to Barclays(UK) ????? I smell a RAT. How much is Absa affected by the sub prime issues????? I hope their savings accounts are safe. by dpd on October 15 2008, 11:18 Find this comment inappropriate? Report it

think long term If house prices fall, then banks fail. Banks need to look at better mortgage tools to encourage demand for property. There is nothing wrong with 35-40 year or 'interest only' mortgages , yes you pay more interest but OCCUPATION/POSSESSION of the . .more property is yours. IF you were passed on your parents property bought in 1978-88 @ R 60-250 000 with the original capital amount still owing, is that not an asset. Property as an asset class is a survivor, sentiment on property is not. . .less by mortar on October 15 2008, 11:19 Find this comment inappropriate? Report it

Guilty ABSA admitting that original loan not linked to "value "of house. BUT>>bank valued the house!! So value played no roll. The banks just gave easy credit to beat the NCA. So that estate agent,mortgage originator and sales people at bank get more comm. Nice! by Vox on October 15 2008, 11:20 Find this comment inappropriate? Report it

ABSA HOME LOANS WE GET IT WITH RMB by RMB on October 15 2008, 11:21 Find this comment inappropriate? Report it

By the way Apply means -the full monty application -from scratch -with proof of the color of your grandfather's eyes. by Vox on October 15 2008, 11:24 Find this comment inappropriate? Report it

Leeches I raised several concerns about this last year. Gogos were spoiling themselves at Maponya mall on the house, encouraged by the banks. My lament is why is Trevor oblivious to the need to protect home-ownership instead of worrying about car . .more allowances. Come to think of it, this crisis is founded on such oversight, which the Americans are now trying to remedy. But I doubt that Trevor will do anything anytime soon. Except fret over the colour of his budget vote tie. . .less by Phreebie on October 15 2008, 12:04 Find this comment inappropriate? Report it

ABSA ABSA are in the poo.............! Definitely agree with earlier comment....ABSA links to Barclay's UK are the reason by soon to be "Ex Absa" client on October 15 2008, 12:19 Find this comment inappropriate? Report it

Credit Crunch The true reason for freezing surplus/ extra funds on morgage bonds is due to the massive international withdrawal of funds from SA due to the international liquidity crisis in the USA, UK, Europe, etc. SA now experience the after effect liquidity crisis . .more ourselves. First the JSE and mutual funds were hit hard and now our largest banks is running out of cash! And that's the true facts. Seems that a world ressession is eminent. . .less by Private Bank Client on October 15 2008, 12:24 Find this comment inappropriate? Report it

Rethinking ABSA I am rethinking my position with ABSA. When I had no money and starting a business they grilled me and didn't help. Now that I am succesful with my business they still try to tell me how to manage my money. BYe-Bye ABSA. by Thinker on October 15 2008, 12:36 Find this comment inappropriate? Report it

I smell a rat! I agree with an earlier comment. Why did ABSA go about this all "underhanded" not informing their clients? Something to hide I reckon. How can you be penalised for using a facility (access-facility) that the bank itself (and all other banks) has put in . .more place. I was thinking of moving my bond to a private bank...I think the time has come. . .less by Soon to be Ex Absa client on October 15 2008, 12:56 Find this comment inappropriate? Report it

The bank doesn't know what their properties are worth If the banks think their values lent on are down 20%, then they're dreaming. Somewhere double that amount is more accurate. by The cold face of the market on October 15 2008, 12:57 Find this comment inappropriate? Report it

Tards These Tards just froze my "flexi-reserve" because I applied for an exention on my bond. Listen up muppets - the reason I applied for an extention is because I want MORE money....not so that you can tie up the money I have. by Soon to be Ex-ABSA client on October 15 2008, 13:40 Find this comment inappropriate? Report it

Give them a break You guys are so quick to turn on the banks when you need them. No one could have predicted the extent of the global crash in recent weeks. The banks are not a public service, they are businesses that need to cover their risks. Furthermore, they . .more are not your freezing your money. Without re-valuations on current housing, you are basically asking them to release unsecured money to you which is not fair. And as ABSA is far and away the leading retail bank in the country it isnt too long before the other minnos start following their policies. We should be grateful that our exposure to the subprime crisis is minimal otherwise our banks would also be nationalised and once the government start implementing regulations with our money,..its all over! . .less by Wake Up! on October 15 2008, 14:19 Find this comment inappropriate? Report it

Banks Wow, these times are amazing, so nice to see our SA BANKS "true colours". They hassle us when we want money and take ages to decide on whether you should get it or not based on the securities you can offer them as an individual! When you are . .more in a bit of a knit due to cash flow banks want answers there and then. Lets face it, banks are businesses that have to make a profit to impress shareholders and cover overheads. Banks are now in deep water, their focus is to stay afloat, kicking and thrashing there arms and legs so that maybe somebody (government) notices and "hopefully" bails them out. In doing so they miss look the rope (consumer) that they where playing with earlier, rope which they held onto as they jumped in. Don't neglect your clients ABSA, NEDBANK, STANDARD BANK AND FIRST NATIONAL BANK... . .less by The Upset Entrepreneur on October 15 2008, 14:32 Find this comment inappropriate? Report it

ABSA Moneymarket unit trust Some time ago the ABSA Money market unittrust also made a mess. I received no pay back from that - only weak excuses. They take our money and speculate with it! by Ex- ABSA Money market on October 15 2008, 14:43 Find this comment inappropriate? Report it

@Donkie In reality the banks were giving away credit like loose change. And so they created a culture of not saving. I can tell you many stories of that and broken marriages due to the ill discipline of one of the partners. ABSA is not a Volkskas anymore, it is . .more Barclays U.K. and somewhere there was an article that it will support bail-out plans (was it the U.K.) - as long as they don't do it with my South African savings! There is pretty little conglomerate South African left - their loyalities lie elsewhere. . .less by Brompot on October 15 2008, 15:20 Find this comment inappropriate? Report it

It looks like Absa is going down Barclays would never pull this trick in the UK. If I was a ABSA shareholder i would get out now! Depositors dont worry, Tito will buy ABSA for R1. by Deano on October 15 2008, 15:27 Find this comment inappropriate? Report it

Well done ABSA - lets hope other banks follow I have no debt and lhard earned cash in the bank. This will help protect responsible people. And those gun ho debt ridden cowboys can squirm and die for all I care. Our banks are proactive and not like the bank crooks in USA. by Smiley on October 15 2008, 15:33 Find this comment inappropriate? Report it

Hi , my name is Smiley and I work for ABSA by AA on October 15 2008, 16:06 Find this comment inappropriate? Report it

banks insolvent Due to fractional reserve banking and house prices declining the banks run an insolvency risk. by dewald on October 15 2008, 16:06 Find this comment inappropriate? Report it

ABSA you just killed a product Congratulations, you just killed the access bond. Good luck in convincing anyone to put extra cash in their bond in the future. You have killed something that was very valuable to all SA banks, short term thinking at its best. ABSA, today, . .more tomorrow, together? . .less by sg on October 15 2008, 16:12 Find this comment inappropriate? Report it

Hee hee AA THere are a few like Smiley who are happy with this. Reckon they also work for Absa or another bank pulling a similar move. by Chuck L on October 15 2008, 16:16 Find this comment inappropriate? Report it

absa client relations absa need to improve vastly on service delivery and client care. there are branches and branch managers who treat customers like....... by client on October 15 2008, 16:56 Find this comment inappropriate? Report it

whats going on? are other banks going to follow in ABSA's footsteps? by deeplin on October 15 2008, 17:10 Find this comment inappropriate? Report it

Access?? I have just put an inheritance from my Grandmother into my bond...I owe about 15% of the total value of my property! Now I have to fill in forms to survive the down months of a seasonal business when there is no income?? by Huh? on October 15 2008, 17:17 Find this comment inappropriate? Report it

Bye bye ABSA I will just go to a other banking. ABSA didn't think clearly on this one! Why would I pay more money off on my bond if I can't use it again in difficult times. It is an ABSAlutely S*it idea absa....... by Bye bye on October 15 2008, 17:35 Find this comment inappropriate? Report it

B***** this, it's my bloody money. I run a rather seasonal business using my access bond to park money when it's coming in and access it when needed, when times are quieter. I could pay the bond off but prefer to keep this access part open, as it the easiest access some one like me has to . .more money when needed. And it's cheap money. (perhaps there lies the rub) It's worked fine like this for about 8 years. We are taIking about a 500k bond, value of property now R2m. If they get ratty every time I need to pull some cash, I think I will have to take my bond somewhere else. But where? They are all as bad as each other. . .less by Freelance worker on October 15 2008, 17:44 Find this comment inappropriate? Report it

absa currie cup banking absa thinks they own us. they think they can prescribe. they think we are idiots. they must rather leave absa curriecup rugby and concentrate on banking by springbok on October 15 2008, 18:11 Find this comment inappropriate? Report it

People, please calm down Like Dan said, this only affects the access bond option in which you could withdraw monies up to the original loan amount. In this case you will lose this facility and will have to reapply for the second option, in which you can only withdraw the extra . .more money you paid into your bond (over and above the standard repayment). If you had the second option all along, you should not be affected. I think this is just sensible (in the current economic climate where property is being rerated), and as an ABSA client I am happier that people are in this way encouraged not overextend themselves with foolish lending, which would otherwise contribute to the whole house of cards coming down even faster at some point. . .less by BB on October 15 2008, 18:14 Find this comment inappropriate? Report it

@BB At last at home I was able to access the ABSA statement on Moneyweb (firewall at work blocks) and listen to a ABSA representative on RSG geldsake on the way home. You are correct - it does not affect everybode, in fact the representative said only 17% of . .more the total bond owners received a notice letter from ABSA. That is responsible banking. But I still hope Barclays U.K. is going to pep up the international meltdown with my hard earned money in South Africa. . .less by Brompot on October 15 2008, 19:11 Find this comment inappropriate? Report it

rot rot rot !! JUST HEARD......THE BARCLAYS CONNECTION IS RIGHT!! GET EVERY CENT YOU CAN OF YOUR SAVINGS OUT OF ABSA ASAP ASAP ASAP!! THEY MIGHT FOLD by super duper on October 15 2008, 20:53 Find this comment inappropriate? Report it

as a shareholder in absa this sounds good... ...prudent and solid risk management in a falling market well done! i'd rather lose a few custies than my shirt..... by charlie on October 15 2008, 22:03 Find this comment inappropriate? Report it

GREED When banks made money available did they consider that the only person that will suffer is the person lending and not them .They saw there was money in processing their own bonds , walla .... now u cant even access your own money without an application . .more ?????? whose buying our banks out. . .less by what's new on October 15 2008, 22:34 Find this comment inappropriate? Report it

Bond Availibility Thank goodnes i did not change my bond when they offered me all the benefits of a flexi-bond. by Graham on October 16 2008, 07:47 Find this comment inappropriate? Report it

SERVES YOU CLOWNS RIGHT Reading all the comments here from all the clowns..its no wonder ABSA put restrictions on readvances. People in this country use their bonds as ATM's buying cars and luxury goods only to have their homes repo's. Somehow this move by ABSA is . .more surely not going to be the end of it. The others bank will follow suit. This is a wise move to prevent further losses due to bad debt. So if you dont like it, stick your money under your pillow...mamparas!!!! . .less by WTF on October 16 2008, 08:36 Find this comment inappropriate? Report it

Hi, my name is WTF And I work for ABSA by AA on October 16 2008, 08:56 Find this comment inappropriate? Report it

Sad comments I've just gone through all these comments and find it sad that the ignorant see their comments and speculation as fact. Do some research so that u can make informed comments instead of just sounding like idiots. SA banks have been isolated to an extent . .more for a few reasons (NCA, excon etc). Capital is also costing more these days- read up on Basel 2. All of u talk as if Absa is stopping u getting at YOUR money HOWEVER u forget we are talking about a homeLOAN! This means u are borrowing money which means there's risk involved. Its risk assessments which have meant u can sleep peacefully knowing your SAVINGS are safe in SA banks. Get informed so that can be clever and not just try to pretend to be. . .less by Banker on October 16 2008, 09:02 Find this comment inappropriate? Report it

Access to equity. I can live with stopping access to the equity portion of the bond, it makes sense. But why oh why must I go and stand in a freaking queue again to fill in another freaking form to get access to my own pre-paid amount. This wastes my time, and is highly . .more inefficient. The pre-paid amount posed no risk to ABSA, as their risk lies in the original bond versus property value and client profile. . .less by A step back on October 16 2008, 09:04 Find this comment inappropriate? Report it

Refinancing Does this mean they will stop refinancing also. I really hope so. Your house is not n ATM. by Anon on October 16 2008, 09:07 Find this comment inappropriate? Report it

BTL crowd affected? Does this hamper the BTL crowd in anyway? What if all banks start doing this? by dvdm on October 16 2008, 10:03 Find this comment inappropriate? Report it

Hope it effects the BLT crowd The TREOC BLT clowns uses equity/refinance to cover their repayments. They will soon find out its not sustainable. Another business that sells GREED. by Anon on October 16 2008, 10:18 Find this comment inappropriate? Report it

The flip side to the freezed coin I'm not a brain surgeon, but I think comments here are moronic. I'll say it again. Intead of people being worried about withdarawin cash out of the bonds, shudn't you rather skip your monthly debit order(s) until you get back on your feet, provided you've . .more paid in advance off-course!!!!!!!!!!!!!!!!!!!!!!!!!!! . .less by Supafly on October 16 2008, 11:46 Find this comment inappropriate? Report it

You will get a bad credit record if debit orders aren't honoured Surely? by No way supafly? on October 16 2008, 13:51 Find this comment inappropriate? Report it

HONESTY in the system where ? Barclays came back to continue the colonisation this time with worthless paper money. Its a trick that works all round the world... But people are slowing start to wake up GOLD is honest money. Rather save krugerrands than paper thats not even good to . .more use in the toilet. . .less by 24Karat on October 16 2008, 13:59 Find this comment inappropriate? Report it

ABSA Subprime exposure Does anyone know exactly what the degree of ABSA's exposure to the subprime mortgage crisis in the US. I heard that they did in fact buy a whole lot of debt..... by Azim on October 16 2008, 17:53 Find this comment inappropriate? Report it

Hey, Banker Just read your comments, banker. Actually, it is not ABSA's money, it's MY money. They loaned me R750k on a R1,5mil house. The the extra R350k paid in over time is mine. I park it there. It's an efficient way to lower the bond etc. as we are . .more encouraged to do as responsible citizens. All good so far but if ABSA make it difficult for me to access MY money, as they claim they won't (can we really believe them?) then I have a problem. And I will have a major problem with them. And so will others. Capish? So go back to reading your Basel 2 blah blah blah but don't touch my money, banker. . .less by Livid on October 16 2008, 19:50 Find this comment inappropriate? Report it

Dumm A** bankers one way to tip the scale Most people that have parked their money probably dont need it, but would like to access it just in case. Now I predict two things that will tip the scales and probably destoy a few banks in the process. 1) Nobody will put their extra cash in the bank . .more anymore 2) Anybody with extra cash will remove it just in case. Net result banks have no money to loan anybody else .... repeat of 1930. . .less by Bemused on October 17 2008, 10:45 Find this comment inappropriate? Report it

@bemused 100% Banks need to think further than their current interests, risks, costs etc. I watched an interview on Gardiner of Shamwari fame last night. He went bust the first time because he was over geared. He started again, buying back his companies . .more within 2 years. Then one day his BANKER called in his loans as he had "too many balls in the air". Luckily this time he was able to switch banks or he would have gone bust for a second time. He then went from strength to strength. Apparently his first BANKER calls him all the time now to ask if he would ever consider switching back. Go figure. . .less by Observer on October 18 2008, 10:52 Find this comment inappropriate? Report it

Only for "high risk" clients...? I say bull... I got the letter. I have two bonds with ABSA and by putting all extra cash in, the one bond is fully paid, but still open, the other one is more than 60% paid with the extra money I have put in... It makes sense to park my money there, as . .more the saving on interest is higher than what you would earn in any of their saving schemes... My credit card is paid up at the end of each month, and I do not have an overdraught facility... I leave R 10k a month in my current account in order not to pay bank charges... So, I don't have any debt, except for the bit in my one bond, I have lots of money on hold in my bond accounts, what exactly makes me a "high risk" client...?? The fact that I don't need their pathetic bank and can move to another bank?? Just because ABSA does not have my crown jewels in a vice makes me a "high risk client"... Get real ABSA... you have a cash flow problem, and because you could not willy-nilly lend out "my" money that is kept in the bond account, you want to take it to lend out, and I have to apply to get my own money back...? Yeah right... . .less by Obie on October 23 2008, 08:54 Find this comment inappropriate? Report it

ABSA customer service We should not be surprised that ABSA needs to freeze our excess funds as they are frantic about their rapidly decreasing liquidity ratios. Yes, I was pissed off that they unilaterally altered my contracted flexi loan contract, to my detrement and . .more told me my 99.5% paid off bond will be frozen. So I have paid the last R100 for my personal house and closed it down. My 2 BTL houses will remain fully bonded to offset interest against taxable earnings. These are with FNB and it still allows flexi-boinds (for how long? perhaps when ABSA takes a knock for being autocratic a-holes, they will consider their options better to not P***-off their customers) I have also drawn down my current accounts and money market accounts - both personal and business. All I can say is ABSA has never cared a stuff for their customers, but were keen to encourage debt in the good days, and we should not care for them except to thank them for the warning and avoid the biggest bank-run in SA history. As for those worried about house prices and who have over extended themselves (over geared = greed)? Wait 6 months and then wonder why you did not sell today. For those like me with ve equity; sit back and enjoy the fun! . .less by low risk but ex-ABSA bond owner on November 07 2008, 13:02 Find this comment inappropriate? Report it

Options Absa has unilaterally frozen the funds I effectively deposited in the bond account (i.e extra funds above the bond repayment commitments). I was firmly under the impression that these funds will always be available for withdrawal, similar to funds . .more deposited to a bank account of a current nature (savings, cheque etc).. Can they do the same with these other bank accounts? Through this action Absa is either in breech of contract (a legal issue), or they have deliberately and furtively underplayed these powers when I took out the bond (a customer service issue). I would like to know what avenues of retribution are open to me either way. Can I invoice them for the cost of application (time, travel costs, parking fees etc.), and perhaps summons Me. Ramos to the Small Claims Court if they do not pay up? Can I sue them for breech? Where should I go with my bond? . .less by PS on January 24 2009, 13:29 Find this comment inappropriate? Report it

ARROGANT BANKS There are a number of sites on the Net where people cannot believe the arrogance of banks, specially ABSA. It is time to claim back our percentage that we as clients own in the various Banks that we support! The time has come to unite all our . .more grievances and frustations and take synchronized actions to show the Banks who is the majority shareholder in 'their' business. Lets start by submitting ideas on what actions we can take like to boycott a ABSA sponsored rugby game for instance - and letting the media know about our intentions. I also believe their is a new Bank that will soon make its appearance on the South African Banking scene with its main objective to be exactly the opposite as this current arrogant bunch - costs included! . .less by Yes, WE can! on February 01 2009, 17:05 Find this comment inappropriate? Report it

Nedbank exactly the same I went to nedbank (baning with them for over 20 years) to request the monies sitting in my bond account, to pay off my credit card (also with Nedbank). After 3 months of nagging my Personal Banker for a response... it was denied... now I am . .more being sued for the non payment of my credit card. whatever happend to "let us help you" or "let us see what we can do" Ha Ha Ha . .less by Had enough on October 14 2009, 17:41 Find this comment inappropriate? Report it

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