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The search for someone to blame continues over the problems that erupted when the properties of foreigners who bought homes at the Kulaksız site were put up for auction. In an interview with Cem Kar, Banks Association President Yunus Rahmioğlu assessed the sector’s difficulties and the allegations, saying that the banking sector, which has been the target of criticism over these events, is being made the scapegoat. “Banking is an honest profession. Accusing banks of usury today is like a cornered cat swiping at the person in front of it,” Rahmioğlu said. He added that bankers were also at fault for the properties being put up for mortgage sale, as were the foreigners who bought real estate without doing their research.
“Bankers are also at fault” Rahmioğlu said that a crisis in the country’s construction sector erupted after the Orams case, and that the global crisis, which began before this problem had been resolved, made matters increasingly worse. Rahmioğlu said: “A crisis in our country’s construction sector began after the Orams case. After this incident erupted, a crisis also broke out around the world before solutions could be found for this issue. As in every country, it put pressure on national economies. With another crisis also hitting the construction sector, the country and the sector returned to their main problem: the problems facing the construction sector. The outcome of the Orams case was the construction sector’s biggest problem. Meanwhile, this crisis has been going on since 2007. By this point, various other factors had become part of it, and complications arose, as the term is used in medicine.” Rahmioğlu said the case concerning the Kulaksız site had been brought before the courts in 2006 and that the legal process was slow. He said bankers were also at fault for failing to properly assess the loans they issued, which led to the properties being put up for mortgage sale. Rahmioğlu said: “The Kulaksız case was brought before the courts in 2006. In 2006, the loan became impossible to repay, and the bank concerned began legal proceedings. This case, which entered the legal process in 2006, has reached this point after a long four-year period, and after four years it has finally reached the stage of a resolution. This is one of the biggest problems facing our sector, because if a bank loan ends up in this situation, it means the bank made the wrong assessment. In fact, that loan should not have been given to that person. When banks issue loans, they do so to collect the money on time or according to the repayment plan agreed in advance. If there are currently 278 properties up for mortgage sale, these cases are the result of mistakes made by bankers. If they had properly assessed these loans, there would have been no need for these people’s properties to be put up for sale.”
“We should not generalize” Rahmioğlu said that competition in the banking sector was fierce and that the sector was therefore in a difficult position. He added that the situation created by a few banks should not be attributed to the entire sector. Rahmioğlu said: “Competition between banks is cut-throat. In such a competitive environment, everyone is thinking about how to make money. To make money in banking, you have to issue loans. You want to issue a loan, but everyone is offering different rates. The intensity of competition, and the fact that each bank takes on a different level of risk, is also putting the sector under pressure. The banking sector is not making a profit today because of high interest rates. Some banks may be making a profit. It is like a horse race: one person may win the grand prize, while thousands of people behind them may win nothing. It is not right to make such a generalization based on a single winner. Of course, mistakes are made in the banking sector, but the competition we are seeing now is fierce enough to break bones. We have raised many of our concerns on this matter, but none of them has been resolved.”
“They should have considered it before taking out the loan” Rahmioğlu said he was saddened by allegations in the press that banks were engaging in usury. He said that people could compare banks’ loan options and should have considered them before borrowing. Rahmioğlu said: “Banking is an honest profession. Accusing banks of usury today is like a cornered cat swiping at the person in front of it. There have been a few cases of wrongdoing, and there may be more; I am not going to defend that. But please, let’s not reduce the banking sector to usury on the basis of two cases. We have never questioned what percentage of profit builders make. We have never asked how much they sell a building or apartment for after it cost them £40,000 to build. I cannot understand why banks are being questioned over this. They call banks loan sharks. They should have looked into that before taking out a loan. One bank said, ‘30.’ Go and ask another bank what rate it will offer. There is no banking monopoly in this country. There are many banks. There are banks that welcome people with legitimate requests. Just as people go from one place to another to research what car to buy, they should do the same with banks. When I first took up my post as association president, I advised everyone not merely to live within their means, but to keep one foot inside the blanket, because we were entering a crisis for the first time and there was no knowing what would happen. At the time, some other people in the sector were also saying that society needed to consume so that the wheels of the economy could turn. There was pressure on banks then, too. People were saying, ‘Let the banks lend, and let people consume.’ At that point, we took a stand as an association and said that taking on debt was like strapping a bomb to your back that would explode in the future. We are not opposed to consumption; everyone can take on a limited amount of debt. However, we said it was wrong to encourage this with incentives or messages such as ‘loans of up to 20 times your salary.’ People with savings have an advantage during a crisis because the prices of goods and products fall. Let them come forward and spend, but there was no point in rushing out to consume recklessly. This is still the case, because in our country there is uncertainty stemming from the fact that we cannot be a normal country. We have to be very cautious.”
“Foreigners should not be naïve” Rahmioğlu said that banks had not caused hardship for the foreigners who were affected when their properties were put up for sale. He said he believed that the foreigners who had not chosen the methods commonly used when buying homes in Europe would not have suffered if they had acted prudently. Rahmioğlu said: “A law was passed in our country to protect the rights of these people in this sector. The law said: ‘When you buy a property, go and register it at the Land Registry Office.’ Once it has been registered, no bank, institution, or organization can place a mortgage on that property without obtaining the signatures of the parties involved. In doing so, the buyer also has the right to ask, ‘Was there a mortgage on this property before me?’ In other words, the law was passed so that people could see that risk in advance. We are not implementing it. As for the issue of foreigners, their conduct was even more illogical and difficult to understand. Today, when someone buys a home in Europe, they buy it through an estate agent, and their lawyer gets involved. Their lawyer looks into it. Our citizens may not be inclined to do this or may not know about it, but that is how it is done in Europe. Why isn’t it done that way here? These people should not be so naïve as to come all this way and expose themselves to this.”