Draft Interest Law limiting the maximum interest

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
25/11/2011 12:59

Accordint to Havadis daily the new draft law about interest is bringing down the accumulated interest for those cases that have not been settled yet.



Accordinbg to the new draft law, the principal money will be multiplied as follows depending on years:

Year, TL, foreign money

2000-6.35-2.27

2001-5.5-2.12

2002-4.57-1.97

2003-3.80-1.85

2004-3.20-1.73

2005-2.78-1.62

2006-2.49-1.52

2007-2.16-1.41

2008-1.85-1.30

2009-1.57-1.22

2010-1.35-1.15

2011-1.17-1.07



Thus if you borrowed 100 TL in 2000, capital plus interes cannot exceed 635 TL. I hope this helps

ismet

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
25/11/2011 13:35

I have not read the details but it will be interesting to see how the courts will handle cases like K5. In Kulaksiz case, the court case between the Developer (the borrower) and Finans Bank is over and the bank claimed the houses buildt by the developer. On the face of it the new law when it comes into effect will not be much use in this case. However, there is a legal battle between the owners of K5 and the Bank and the ingenuity of the judges wil be in great need to interpret the law in such as way so as to benefit K5 owners. I am sure the judges will bend backwards to help the victims.



The whole mess is partly the making of the Constitutional Court. The National assembly had empowered the Council of Ministers to limit the maximum interest accumulated. For TL depending on years it was set at 3, 4,8, 9 and finally ten times. somebody took the matter to the Constitutional court arguing that ten times was too much. However the Court decided that it was unconstitutional for the council of Ministers to pass on its right to limit the accrued interest to the Central Bank and thus all limits set by the Cenbtral Bank was found unconstitutional. The court expected the government to step in immediatelly and put it right but for years they did nothing.

ismet

Groucho



Joined: 26/04/2008
Posts: 7993

Message Posted:
25/11/2011 17:04

It's usury plain and simple and any banks charging loan shark rates of interest should be avoided like the plague as they are obviously run by people without conscience.

In the UK (yes I know this isn't the UK but it's worth looking at the example) if a rate of interest is so high it's injurious the courts have the power to instruct the interest accrued which falls over and above the norms for the type of loan can not legally be charged as the bank, as long as it gets its money back with a suitable profit has suffered no loss... they never should have loaned money at exorbitant rates in the first place... as responsible lenders that is.

Groucho



Joined: 26/04/2008
Posts: 7993

Message Posted:
25/11/2011 17:08

The idea that somehow the banks are the victims in these cases is laughable.... as responsible business people they should have regard to due diligence. Lending money to businesses at rates of interest that would preclude the repayment (i.e. where it's a self-fulfilling prophecy that the interest is so high no business would be able to repay it) they are foolish to the extent that they ought to be declared unfit to run a bank.

It's also morally reprehensible to knowingly lend money to somebody using as collateral properties already sold to a third party. Their claim to the property should therefore be null and void as it goes against natural justice for it to be otherwise.

Bradus


Joined: 25/02/2007
Posts: 2641

Message Posted:
25/11/2011 17:30

Well said Groucho. Another law that fails to address the real problems of mortgages, loans and memorandums on property already fully paid for by an innocent party.

pollymarples


Joined: 08/08/2010
Posts: 1778

Message Posted:
25/11/2011 17:40

So just for an example and taking K5 's case. The Bank loaned £1,600 in March 2005

and then 100,000 TL in November 2005 - as an example what would be the maximum debt under the new law now? Purely hypothetical Elko.



I am sure that Akfinans Bank sees the case as settled, but I know we at K5 do not.

pollymarples


Joined: 08/08/2010
Posts: 1778

Message Posted:
25/11/2011 17:42

sorry Elko, I meant un der the new PROPOSED LAW.





somewhat less than 2,077,000 TL I would wager. Every time I see that figure it seems more and more obscene.

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
25/11/2011 17:47

Polly,

According to the *proposed* law, £1600 should become £2592

100,000 TL should become 278,000 TL. So the total should be less than 286,000 TL maximum.

ismet

pollymarples


Joined: 08/08/2010
Posts: 1778

Message Posted:
25/11/2011 17:56

It is laughable that the Government are now proposing some form of damage control but still expecting the innocent vctims to pay mortgages they knew nothing of, received none of the money either. Having seen the spectre of 250% on a loan taken out on properties that did not belong to the borrowers in K5's case, they think we are all so worn down, we will accept a solution that sees us paying a lesser amount. Is that meant to be justice. Will that punish the perpetrators of the frauds. NO, it will punish the victims YET AGAIN.



Suddenly following the Fatisa auction the govt are taking notice, why - because it affects the 'bg boys' Do they really give a toss about us?

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
25/11/2011 18:05

Polly,

The new proposed law is not really addressing your problems and I don't think it was meant to be so. There are thousands of court cases about money owed to banks, over 100 people in jail for same reason and 5200 people took refuge in south Cyprus. So they are trying to address this rather than the aggrieved buyers.

I hope after this they sit up and consider the property issues.

ismet

pollymarples


Joined: 08/08/2010
Posts: 1778

Message Posted:
25/11/2011 18:06

Can anyone see Akfinans Bank willingly kissing 1,791,000 TL goodbye???



Or willingly giving up my villa, their weekend retreat?



Or giving Eva Mc Cluskey her villa back? So basically if you divide 286,000 by 12 = you wuld be looking for

23,834 TL from each owner, the 13th has allegedly settled with the bank which is about £8,400 each. But they were not responsible for the debt.

pollymarples


Joined: 08/08/2010
Posts: 1778

Message Posted:
26/11/2011 09:03

Protectionism at its worst then. Only take action when it affects the voters. In many ways it just highlights the lack of concern by this govt. FOR THE HOMEBUYERS. what is sauce for the one type of borrower must be sauce for all types of borrowers.



In many ways it strengthens the ECHR cases then.

pollymarples


Joined: 08/08/2010
Posts: 1778

Message Posted:
26/11/2011 11:57

Here's a funny one. I said to a TC friend, why did all these so called business men sign up to such high interest rates, she said, they didn't know - you have to wonder why they are let out alone never mind allowed run a business. Not acceptable. Homeowners didn't know because the were deliberately kept in the dark by both the borrowers and the Banks, but so called business people using that excuse = pleeeeeease..

Bradus


Joined: 25/02/2007
Posts: 2641

Message Posted:
26/11/2011 14:55

"why did all these so called business men sign up to such high interest rates"



It really didn't effect them Polly. They had no intention of paying it back! How many that did this never made a single payment? It was always intended that the new buyer would settle the debt by way of forfeiting his fully paid for property. The bank knew this and so did the developer.