IN GOOD FAITH: Pay the consequences
Banks cannot be held responsible for reckless lending if loan applicants are dishonest about their earnings
If you don’t tell the truth about your income when applying for a bank loan, how can you later claim to be the victim of “reckless lending”? This is a question that has been raised in the high court via the sad tale of Adelle Potgieter. A prominent Eastern Cape charity worker, Potgieter established and heads two nonprofit organisations. She used to work for the police, but left the service after several illnesses. She now, through what the court described as “a number of admirable initiatives”, helps disadvantaged and handicapped people. In 2007 Potgieter decided to buy a smallholding where she would live and base her charities. The problem was that she needed to borrow more money to pay for the property than a bank was likely to find she could service, given her actual income. Undeterred, she applied for a loan with supporting documentation that included letters from her charity organisations.
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