Joburg court ruling paves the way for class action suit against banks

Posted 18 September 2018

Last week’s Joburg court case forcing judges to impose reserve prices on all auction sales resulting from bank repossession has several important ramifications, not least of which it paves the way for a class action suit against the banks for decades of stealing people's home equity in violation of the Constitution.

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Gauteng court judgment puts an end to cheap bank repossessions

Posted 14 September 2018

A full bench of the South Gauteng High Court ruled on Wednesday that repossessed homes may no longer be sold at auction without reserve prices, except in exceptional circumstances.

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Judges grill banks on home repo practices

Posted 03 September 2018

A full bench of the Johannesburg High Court sat last week to deliberate on how and when reserve prices should be applied before repossessed homes are sold at sheriffs’ auctions. The three judges berated the banks for arriving in court without proper paperwork and expecting to be given judgments against clients.                        

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Court papers reveal the state of the mortgage sector

Posted 26 August 2018

Court papers filed in the South Gauteng by two of the major mortgage banks – Standard and Absa – provide a fascinating insight into the health of SA’s property sector. There are about 8 million properties in SA, of which 82% are residential. This amounts to 6,5 million residential properties, of which 33,5% are bonded. The bonded properties were worth R2,6 trillion in 2017, amounting to 52,4% of the total value of all residential properties in SA, and 56,5% of GDP.

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Nedbank slammed for brazen negligence

Posted 18 August 2018

Ordinary bank clients are seldom legally successful against the giant banks to which they entrust their money, even when the banks make terrible mistakes. That’s why the Namibian case of Faida Trading has intrigued legal writer Carmel Rickard. In her A Matter of Justice column on the Legalbrief site, she wonders what caused Nedbank to resort to what looks to her like bullying tactics rather than owning up to an awful and unexplained error by their staff. In the end the judge slammed the bank for being ‘unreasonable’, ‘obdurate’ and ‘brazingly negligent’ – but the customer was put through the wringer in getting there.

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Court to decide on how to handle home repossessions

Posted 15 August 2018

A landmark case to decide how banks should deal with home repossessions will be heard on 28 and 29 August in the South Gauteng High Court.

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Landmark court case seeks to stop over-charging by creditors

Posted 13 August 2018

Court papers filed in the Western Cape High Court last week by University of Stellenbosch’s Law Clinic and Summit Financial Partners make for disturbing reading. They are asking the court to stop creditors from loading unlawful costs onto the accounts of distressed debtors, which they reckon has cost debtors R1 billion in unlawful fees. 

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Can banks sell your house for next to nothing?

Posted 31 July 2018

One of the most popular methods by which South Africans purchase immovable property is through a loan from a bank. This process involves a mortgage bond being registered over the immovable property as security by the bank to ensure that if a person fails to pay back the loan, the bank can rely on this as security in order to claim any outstanding money owed to them.

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Absa's rebranding launch rudely interrupted by protesters

Posted 13 July 2018

Absa launched its new logo and image this week as part of its separation from Barclays. Visitors to Absa’s head office in Joburg were greeted by a gathering of aggrieved customers, led by the Lungelo Lethu  Human Rights Foundation (LLHRF), protesting the bank’s abusive home repossession practices. A memorandum was handed over to a senior representative of the bank’s legal department, with an undertaking to commence a dialogue with LLHRF to iron out grievances.

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Massive class action suit against Australian banks

Posted 31 May 2018

A Royal Commission of Inquiry into banking misconduct in Australia has heard heart-rending testimony of brutal banking practices, including cases where pensioners in their 80s were forced to sell their homes to repay loans. Now a massive class action suit is in the bake over reckless lending, focusing on those who took out mortgage loans since 2012. This is one of several class action suits now being launched against the banks.

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The ugly face of modern banking

Posted 22 May 2018

A 72 year old man gets a 30 year loan which he cannot repay, so he is forced to sell his house. Bank staff are there to flog you stuff you don't want or need. They hate their jobs, but are given stiff sales target to meet so the bosses can get year-end bonuses that run into the millions. When you default, the bank comes after everything you have. Staff are prevented from talking bad about their employers because of "disparagement clauses" in their employment contracts. Even years after they have left the bank. When, customers are asking, will bank executives get time in jail, in this expose in the wake of the Australian Commission of Inquiry into Banking. You could just as easily cut and paste this story for SA. 

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EFF wants a state-owned bank to counter the predatory practices of the Big 4

Posted 15 May 2018

The EFF has shown itself a force for progressive change in SA, recently tabling a bill which would allow for the creation of a state-owned bank. In this article on Daily Maverick, deputy head of the EFF, Floyd Shivambu, explains how the existing Big 4 banks - Absa, Standard, Nedbank and FNB - continue their predatory practices against South Africans. This article shows a deep understanding of the extent to which banks are retarding the economic development of the country.

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Plunder Down Under: the rot in Australia's financial services

Posted 25 April 2018

The place is Australia, but the pattern is the same we have seen in other parts of the world, with banks gouging their customers with merry abandon. It has all the elements of a crudely crafted, if effective, tale: banks and other financial services, founded, proud of their standing in society; financial service providers, with such pride, effectively charging the earth for providing elementary services; then, such entities, with self-assumed omnipotence, cheating, extorting and plundering their client. 

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A shocking judgment that cannot be allowed to stand

Posted 24 April 2018

The Standard Bank v Nkwana case recently decided in the Pretoria High Court seemed to be a major step back for home owners facing repossession and eviction. The case was argued on behalf of Nkwana by Lawyers for Human Rights, and will almost certainly be appealed - especially the court's ruling that it was okay for banks to continue selling repossessed properties for a fraction of their market value. This absurd judgment prompted a response from former public protector Thuli Madonsela: "With due respect to the court, I consider this judgement to be grossly unjust and inequitable. It is as a setback regarding social justice. Should this matter be taken on appeal, it would be great if all those concerned about social justice join in as amicus curae."

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Petition to Ramaphosa to freeze evictions and investigate bankers for crimes

Posted 03 April 2018

The Lungelo Lethu Human Rights Foundation has sent a petition to President Ramaphosa detailing rampant abuses by the banks. It has asked the President to make it far more difficult to evict defaulting home owners by forcing the courts to sell repossessed properties at market price and allowing financially distressed customers at least six months to get back on their feet before recommencing bond repayments - as is common in many other countries. It also wants the President to order an investigation into the criminal liability of banking executives and directors for knowingly selling properties for less than their value after the Constitution was introduced in 1994.

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Alberton couple kick Standard Bank to touch

Posted 19 March 2018

An Alberton couple recently defeated an attempt by Standard Bank to repossess their home after they demonstrated that they had settled the arrears the bank was claiming. Thousands of other South Africans in a similar position should pay attention. It could save their houses.

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Zuma's mortgage banker, VBS, placed under curatorship

Posted 12 March 2018

VBS, a small mutual bank with R2bn in assets, shot to prominence in 2017 when it awarded then President Zuma a R7,8m home loan. It has now been placed under curatorship by the Reserve Bank following a run by municipal depositors, who have been warned that they are violating the law by placing money on deposit with VBS, as it does not have a full banking licence.

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How Royal Bank of Scotland trained employees to forge signatures

Posted 28 February 2018

Royal Bank of Scotland (RBS) employees were trained to forge signatures on documents and fabricate financial instruments on a routine basis to foreclose on homes they couldn't prove they owned. They also pushed struggling businesses into liquidation and then sold the assets for a profit - all to boost bonuses. One great grandmother nabbed the bank forging her signature to take out an insurance policy shje never asked for. This, by the way, has been going on in numerous cases in SA, with the courts turning a blind eye. It's time for bank whistleblowers to step forward.

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Capitec Bank is the latest target of the sleuths at Viceroy Research

Posted 30 January 2018

Viceroy Research, which last year highlighted accounting irregularities at Steinhoff and brought it to its knees, has this time shone a light on Capitec Bank, calling it a “loan shark with massively understated defaults masquerading as a community finance provider”.

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New court rules make it harder for repossessed homes to be sold for a pittance

Posted 06 December 2017

One of the outrageous abuses taking place under the noses of our courts in SA is the ability of banks to repossess homes when a customer is three months in default, and then sell the property at sheriff’s auctions for a pittance. This leaves the customer without a home, and an outstanding debt to the bank. Needless to say, this abuse was a gift to criminal syndicates and property speculators, who feed on the misery of others by picking up these properties for as little as R100. Well, that just became a whole lot more difficult. New court rules gazetted last week make it far more difficult for banks to get away with this. For distressed home owners, putting up a strong defence against the banks got a whole lot easier. 

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Nedbank accused of reckless lending

Posted 08 October 2017

Nedbank has been accused of reckless lending after a Port Elizabeth woman was lent R30,182 - more than 5,5 times her monthly salary - and ended up paying back more than double this over four years at an annual interest rate of 35,4%.

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The psychological warfare of loan servicing

Posted 01 October 2017

The Foreclosure Machine is engaging in a deliberate strategy of emotional abuse towards desperate homeowners who are looking for an equitable solution (when most simply want an opportunity to meet the terms of their mortgage). The bank representatives may speak professionally, and even appear to be concerned, but their words are meant to deceive and may even kill. The stress created from corporate psychological abuse often culminates in health problems that may result in a silent death or even suicide. The banks do not play fair, and they will do whatever is necessary to take a home - including the destruction of a life if necessary.

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How the banks are denying your Constitutional right of access to justice

Posted 25 September 2017

Here's arguably the most effective tool in the homeowners' arsenal when the bank attempts to foreclose on your house in the High Court - simply insist that the matter is heard in the Magistrates Courts, wher the costs are much lower. Attorneys representing the banks will lose their appetite for the fight because the allowed legal fees they can charge in the Magistrates court in often less than 10% that of the High Court.

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An unlikely alliance of white farmers and Communist Party members join hands to fight evictions

Posted 21 September 2017

An unlikely alliance of white farmers, the SA Communist Party, trade unions and individuals whose homes have been repossessed by the four major banks came together outside the South Gauteng High Court on Friday to call for a freeze on evictions. This is the start of a "mass rolling action" campaign that is now being taken countrywide.

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Shoprite fined R1m for reckless lending

Posted 07 September 2017

It has long been argued that South African banks and retailers have engaged in reckless lending, in complete defiance of the National Credit Act. For example, should a bank entice you into a "consolidated debt" account - rolling all your individual debts into one - it is required to do a fresh credit assessment. If you later run into financial difficulty and cannot meet these monthly repayments, you have grounds for claiming reckless lending on the part of the bank. Shoprite has now been found guilty of this practice by the National Credit Regulator. 

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