FNB client Patience Mavuso has had to fight off repeated attempts to evict her from her property despite having recovered her arrears and reinstated her bond as early as 2016.

FNB claimed she defaulted on her mortgage and took a judgment against her almost 10 years ago. With that judgment in hand, the bank proceeded to sell the property at a sheriff’s auction in 2022, even though it had reinstated its mortgage six years earlier.

The new buyer took the property for a song and then started showing up at Mavuso’s door trying to evict her – in effect, an attempted eviction.

Mavuso informed both FNB and the buyer that he intended to apply to court to stay the transfer of his property on the grounds that he had caught up with his arrears and reinstated his mortgage.

READ ALSO: South Africans can’t afford their homes, but they can’t afford to sell them either

Obstructionist

To bring the claim, Mavuso needed the contact details of the auction buyer – which FNB and the buyer refused to provide.

To get around this, Mavuso had to approach the courts with two interim court applications to obtain the buyers’ information and then join them in the proceedings.

Mavuso and the courts could have been spared two unnecessary requests if the bank or buyer had simply provided the requested contact information for the buyer.

The managing agents of the compound where Mavuso lives sided with the buyers and revoked his access to the compound.

This, says consumer lawyer Leonard Benjamin, illustrates the difficulties ordinary South Africans face when taking on banks in court.

READ ALSO: A Durban woman is reclaiming her home after the bank illegally sold it at auction

Disturbing implication?

The buyers claim that the sheriff did not inform them that Mavuso had filed an application in court to suspend the transfer of his property.

“Had he not done so, it would be a gross neglect of his statutory duties, tantamount to fraud,” says Benjamin.

“And if they were told that the transfer was contested, but they still accepted the transfer knowing that the transfer may be illegal, they would be implicated in the scheme.”

Moneyweb contacted FNB for its side of the story but did not receive a response despite repeated follow-ups. FNB’s lawyers in this case were Bezuidenhout Van Zyl Inc.

READ ALSO: The class action lawsuit shows that banks are selling repossessed homes for pennies in the rand

Confusing…

What we do know from the case correspondence is that FNB has indicated that it will oppose Mavuso’s application to suspend the transfer of his property, but has not filed an affidavit.

Neither the sheriff who auctioned the property nor the auction buyers opposed Mavuso’s application to stay the transfer of her property to the buyers, so she went to court unopposed.

Even before the claim was heard, FNB’s new lawyer (he had dropped the services of Bezuidenhout Van Zyl) appeared in court and proposed a settlement.

Mavuso says she had no choice but to accept the deal out of concern that the matter would be delayed if she did not and she would be subject to further attempts to evict her.

After almost three years, Mavuso obtained an order ordering the Registrar of Deeds to cancel the title that reflected the buyers as the owners and revert to the one that reflected herself as the owner.

Ironically, FNB was on the receiving end of the 2016 benchmark Nkata v FNB The decision of the Constitutional Court that dealt with this type of situation.

The Nkata ruling makes it clear that any defaulting borrower who pays the arrears automatically has their mortgage reinstated, provided they pay the “reasonable” legal costs of the case. A borrower does not need to go to court to assert this right. It is automatic as long as arrears are settled, along with reasonable costs associated with enforcing the agreement.

Despite this ruling by the highest court in the country, banks are still trying to find ways to avoid this inconvenience.

Benjamin says one of the ways banks do this is by loading unauthorized (“untaxed”) legal and other fees onto the customer’s home loan, thereby increasing the value of the debt.

Even when customers catch up on home loan arrears, the bank claims there is a shortfall because legal fees have not been paid.

The problem here is that these fees must be authorized by an independent tax master. Banks are still going to court seeking judgments against customers who have caught up but haven’t (correctly) paid untaxed legal fees, says Benjamin.

READ ALSO: Congratulations to the woman who took SA home loans

Banks versus customers

Mavuso’s story bears striking similarities to that of Valerie Naidoo, who earlier this year stood alone in the Durban High Court against two senior counsel representing SA Home Loans after her home was auctioned for a tenth from the market value – despite the fact that he had caught up with his arrears.

“In Patience’s case, it took three years to reverse the effects of a sale that should never have happened in the first place,” says Benjamin.

“During that time, the debt grew by adding three years of compound interest. In addition, Patience has three years less to pay off her obligation. As a result, she will have to face a drastically increased repayment amount, making the possibility of a future default almost inevitable.

“It is simply not known how many other consumers have been illegally deprived of their property on this basis.”

This article was republished from Moneyweb. Reading the original here.