Lenders under fire from judge

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Durban - Financial institutions came under fire in the Durban high court yesterday for unnecessarily “selling people’s homes from under them”.

Acting Judge Guido Penzhorn challenged several applications that came before him in which lenders were applying for default judgments against their clients, asking that the court declare the properties, usually primary residences, executable.

This means that the properties were usually sold at auction, often for less than was owed, leaving debts which still had to be paid by the owner.

Judge Penzhorn first queried one matter in which a bank wanted an order against an owner who owed R14 000 on a house that he had owned for 11 years.

The owner, W D Ngcobo, came to court to oppose the application and said the family was trying to pay off the debt.

By consent, the matter was adjourned until next month to enable further discussions.

Another matter of concern to the judge involved the property owned by an 83-year-old widow.

“She has been living here for 30 years and has had the bond since 1994. Her husband has died and her son has indicated he is trying to sort out the situation and now Absa wants to sell the house from under her,” the judge said.

Not unsympathetic

The advocate for the bank, Dees Ramdhani, said the bank was “not unsympathetic” but the arrears were substantial.

“There is a whole process before the matter comes to court. And there are contractual imperatives.”

The judge said that the bank then needed to detail that process, and ordered it to deliver further affidavits setting out what steps had been taken to resolve the matter with the pensioner and her son.

In another matter, where the money owing was under R10 000, he refused to grant judgment and ordered that the matter could not be re-enrolled until further papers were drafted confirming that the application had been served personally on the home owner, that the relief sought was fully explained to him or her, and that the opportunities given for the debt to become settled were detailed.

This is not the first time a judge has raised issues with applications involving foreclosure on bond defaulters.

Two years ago, The Mercury reported on criticisms by Judge Rashid Vahed against banks adding legal costs to defaulters’ bills without the sanction of the court.

At the time, advocate Ramdhani told the court that the banks were not quick to act against clients and always tried to settle before going to court “because they recover very little at auction”. - The Mercury



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