Homeowners whose repossessed houses were sold for a fraction of value will head to court to demand billions back explains journo.

A 60 billion rand class-action lawsuit by homeowners whose homes have been repossessed and sold for a fraction of the market value of the house, will head to court soon.

An affidavit filed in support of the R60 billion class-action suit brought by Lungelo Ditokelo Human Rights Foundation against the major banks, based on a sample of about 12 000 repossessed properties, found that these properties were sold for 50-60% of their proper value, mainly through sheriff’s auctions.

Kieno Kammies chats to Ciaran Ryan, a freelance journalist who wrote an article on Moneyweb about the class-action.

The evidence shows dozens of properties were sold for less than 1% of their market value. Of the 200 worst cases, all were sold for less than 17.2% of their market value.

It’s reckoned that about 100,000 South Africans have lost their homes through foreclosure or repossession since the Constitution came into effect 25 years ago.

Ciaran Ryan, Journalist – Moneyweb

But he says, it is not just an issue of money. Debtors’ prisons are a thing of the past he adds.

There are other rights in the Constitution – the right to dignity…you cannot just for the sake of recovering some rands, throw these people out onto the street.

Ciaran Ryan, Journalist – Moneyweb

That is no longer possible in terms of South African law, he notes, saying the R60 billion call-action lawsuit is an attempt to get justice for all these people that have lost their properties over the years.

He acknowledges that it is going to be a long and difficult case.

There is already a lot of technical argy-bargies.

Ciaran Ryan, Journalist – Moneyweb

He says, however, the evidence is clear.

You have one example of a property for R1.3m – I think it was in Johannesburg – it sold for R1000 at auction. Now that is not a genuine sale. That is not real. There is something else there.

Ciaran Ryan, Journalist – Moneyweb

He says he has come across houses in Soweto that were sold for R100 and in some cases for R10. Those cases involved Nedbank.

When I approached Nedbank they said you have got to put this in context. What we did was we credited the defaulting borrower with the amount that was outstanding, so they didn’t chase him up for the balance.

Ciaran Ryan, Journalist – Moneyweb

But when Sheriff’s auctions pop up something appears to be odd, he insists.

It can’t be real.

Ciaran Ryan, Journalist – Moneyweb

But he says banks behaviour has shifted over the years and he does not see as much egregious selling of houses for next to nothing as in the past.

You are not seeing (such extreme examples) today so there has been a change over the years.

Ciaran Ryan, Journalist – Moneyweb

In addition, much fewer properties are reaching the final stage of sale and execution by the Sherriff’s office, he says.

There has been an improvement in the behaviour of bans.

Ciaran Ryan, Journalist – Moneyweb

But, he says, the Covid-19 impact has caused many people to fall into arrears and he says that can escalate very quickly.

They are very fast, in the number of people writing to me about this, to jump to the courts….They are terrifying people and they are putting them under stress. People are literally committing suicide. I am aware of people committing suicide because of the stress of this.

Ciaran Ryan, Journalist – Moneyweb

He advises them to contact lawyers and says there is no need to panic as it is a long process.

But we do need a law.

Ciaran Ryan, Journalist – Moneyweb

My advice to anybody who is getting these kinds of letters is to put in a notice of intention to defend. There is a template letter you can get off the internet. That will immediately buy you some time.

Ciaran Ryan, Journalist – Moneyweb

 

Source: Cape Talk