Nedbank loses bid after couple pay bond two weeks late

A COUPLE from Meyersdal in Alberton nearly lost their home as the bank that held the mortgage bond agreement insisted they pay back the entire outstanding bond for being two weeks late on their payment.

Nedbank turned to the high court in Pretoria, where it claimed the payment of more than R2.5 million from Terrance and Sylvia Mbambo.

This was the outstanding amount of the bond at the time when the couple fell in arrears for only two weeks. The bank initially wanted the court to order that the property be executable and sold so it could recover the outstanding balance on their bond.

But the bank abandoned this demand when the matter was argued in court. However, the bank still insisted that the couple had to pay the full outstanding total of their bond debt, even though their R28 000 monthly instalment was only two weeks late and fully paid by the time the summons was served on them.

Judge DS Molefe not only turned down Nedbank’s claim, but he also slapped the bank with the legal costs. The judge referred to a landmark Constitutional Court judgment in which it shed more clarity on the National Credit Act in relation to consumers.

The judge said the Constitutional Court’s Nkata judgment impacted significantly on the rights of consumers in their relationship with their banks. “The Constitutional Court has made it virtually impossible for consumers to lose their homes.

“Even after a long period of being in arrears, if the consumer made up those arrears and the agreement has not been cancelled; the agreement is reinstated,” the judge said.

In this case Nedbank said it simply acted in terms of the loan agreement signed by the Mbambo couple.

In terms of the agreement, they had to pay their monthly instalment by the first of each month. If they failed, the bank was bound by the agreement to claim the entire outstanding balance of the mortgage agreement at the time.

The couple said they paid “religiously” each month and often even overpaid on their instalment. But on July 1, 2014 they were only able to pay two weeks later.

The couple in fact on this occasion also paid slightly more than their R28 000 instalment. Nedbank, however, insisted that the couple were not punctual regarding their June 1 payment, and that they should thus suffer the consequences.

The couple relied on the Nkata judgment, where Justice Edwin Cameron interpreted the provisions of the National Credit Act (NCA).

At the time, he said it was no longer a case where the powerful creditor could always rule over the weaker consumer. He said the NCA contained clauses which spared consumers the harshness of an era of debt or-unfriendly laws.

Justice Cameron said laws in the past enabled financial institutions to refuse late payments of bonds and accelerate the payment of the entire bond, but things had changed.

Judge Molefe said that when the couple paid their instalment – although two weeks late – the credit agreement was reinstated.

Concourt has made it virtually impossible to lose homes