It’s been known for years that the banks have been flogging off repossessed properties for a fraction of their market worth, but the evidence was anecdotal and fragmented. Not anymore.
“Our South African banks sell property about five times more than the international average as a percentage of the total number of outstanding bonds and 20 times more than best practice,” says Garth Zietsman, a statistician who analysed data from the National Credit Regulator.Lower valued homes were sold for about 40% of their market value, against 81% for the higher valued ones.The evidence shows dozens of properties were sold for less than 1% of their market value.
“Other countries impacted by Covid put a total freeze on evictions, while we imposed a freeze of three months. Three months? There’s no justice in that.“We have default judgments being handed down by Zoom judges because people cannot attend court in person to defend themselves,” says Sibiya.He adds: “People have no idea how to access this virtual justice system – which is in itself a denial of people’s constitutional rights of access to justice.
Now that reserve pricing is part of the law, the banks are still managing to game the system by arguing cases in the high courts instead of the magistrates courts, driving people further into arrears through higher legal costs, and by setting reserve prices so low as to prejudice the defaulting homeowner.
From 1 April 2020, FNB assisted customers with a customer-centric Cashflow Relief Plan to cover all instalments that a qualifying customer has with us. Our Cashflow relief was for a period of 3-months at prime interest rates with a flexible repayment term. Furthermore, a number of pre-selected customers were offered extended relief for a further 3-months, totalling a 6-month payment break.
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