Bank’s abrupt foreclosure

DECISION IRREVERSIBLE: FAMILY DEFENDING THE ACTION IN COURT

Family wanted to pay up their arrears to forestall eviction but Standard Bank cancelled loan. Moneyweb

Standard Bank jointCEO Sim Tshabalala recently claimed that the bank only sells debtors’ homes in execution “as a last resort”. This isn’t the experience of the Kudoos family, who took out a mortgage loan with the bank in 2001.

They run a family business supplying goods and services to government entities, so they sometimes experience payment delays and occasionally fell into arrears on mortgage payments. The bank tolerated this over the years as the Kudoos always settled the arrears when payments came in.

In March 2017, they fell into arrears and notified the bank that bond payments would be late, but as before, they’d catch up on the arrears once payments came in. This time they received a registered letter advising them to pay up in 10 days or face legal action.

When they queried the letter, the bank’s attorneys responded, repeating the threat to launch legal action unless the full arrears (now three months’ bond payments) were paid within 10 days.

The Kudoos asked the attorneys to allow them an opportunity to catch up their arrears by paying double instalments in coming months. They received no reply but in July were summonsed to appear in court. An attorney advised that rather than defending the matter, they use their available funds to catch up on the arrears, which would automatically reinstate the mortgage bond. This is based on a judgment where the Constitutional Court (ConCourt) overturned the sale in execution of the plaintiff’s home and instructed Firstrand Bank to reinstate her mortgage bond after she’d settled her arrears.

But the bank had cancelled the loan agreement, making it impossible for the Kudoos to reinstate their bond. Financial and legal advisor Leonard Benjamin believes the bank did this to circumvent the National Credit Act (NCA).

To save their home, the Kudoos will have to pay the full outstanding balance of about R900 000.

“Standard Bank gains nothing from the cancellation. However, for the debtors, the implications ... are life-changing as they would be deprived of their right to reinstatement, which ... will result in their home being sold in execution and their eventual eviction,” says Benjamin. Simply SMS the keyword BUSINESS and your input followed by your full name, date of birth and suburb of residence to 33521.

Its decision is irreversible as the NCA prohibits the reinstatement of a credit agreement.

In the summons, Standard Bank seems to suggest it cancelled the agreement because it had previously given the Kudoos an opportunity to reinstate the home loan, which they’d done. The implication is they wouldn’t receive a second chance to reinstate it.

The Kudoos are defending the action in the High Court in Johannesburg but Benjamin says the matter may have to be taken to the ConCourt to stop banks attempting to circumvent the law.

When asked to comment, Standard Bank spokesperson Ross Linstrom replied: “As per the Code of Banking Practice, Standard Bank does not comment on the details of a particular customer’s situation with parties other than the customer or those mandated by law to act on behalf of the customer. We will only use legal action as a last resort.” Not cool, Mr Bekker

New property owners not liable for old debt, court rules

Naspers’ N shareholders very unhappy with remuneration policy

ARC Investments IPO targets R4bn valuation

Porritt is a R100-million man, state says

Yesterday’s top five stories on: moneyweb.co.za