A Joburg attorney is prepared to go to the highest court in the land to prevent families being evicted after they sought bonds from a fraudulent company which embroiled South Africa’s four leading banks, unwittingly, in a massive R1 billion home loan scheme.
Homeowners who approached Reverse Mortgage Company (RMC) say the company’s unscrupulous business tactics will leave them desitute because RMC coerced them into unwittingly signing away the ownership rights of their properties.
But attorney Ivan Zaartz, who is defending Petrus Pelser from Kempton Park and 25 other people, has applied to the Kempton Magistrate’s Court to halt the evictions as the transactions were part of a fraudulent scheme. Initially Zaartz was approached by 20 other families who had already been evicted from their homes, but was unable to assist them.
In 2005, Pelser wanted to make renovations to his home but because he had started his own business he could not secure a loan from any bank. A friend told him about RMC and how the company assisted homeowners who had bad credit records and others in Pelser’s position.
“RMC sent a valuator who assessed my home and gave me a value. They told me that they would use a jockey – a person with a good credit record who would get commission when my loan was approved – to sign surety with a bank to secure the loan for me. I didn’t need one, but they insisted.
“A few weeks later the loan was approved and I went in to sign a fat pile of documents. They told me to read them, they weren’t explained. I don’t understand English so well, so I just signed. I thought it was straightforward. I wanted the money to fix my house, then I would sell it at a profit. It was supposed to be simple.”
In order to secure the home loan, clients like Pelser, were instructed by RMC to transfer their ownership to another company (a dummy company controlled by RMC), at which point RMC and the dummy company would retain a large amount of the new bond raised by the banks.
In the end Pelser received an amount of R220 000 from them – but the actual loan secured from the bank was over R600 000. RMC told the home owners to make their repayments into these dummy company’s accounts so RMC could pay the banks back, but RMC did not make any repayments.
Now many have been hit with eviction notices as they have become tenants living on what were once their properties. Pelser said he had no idea he had signed a lease agreement.
For Pelser the situation is dire – he has no clue how much he now owes the bank or for how long he will be able to live in the house he raised his family in for 19 years.
“It’s been going on for so long, it’s almost like a normal thing. We don’t know how long we will have a house.” - Saturday Star