Court blow for indebted homeowners

Dec 21 2012 12:43
Johannesburg - An urgent interdict by hundreds of consumers trying to stop banks from redeeming property and other assets due to non-payment was rejected by the High Court in Johannesburg on Friday.

Judge Brian Spilg described the application as "evidently not urgent".

"This is a gross abuse of court," he said.

The interdict, which sought to stop foreclosure on 1 200 houses and other assets because of non-payment, was brought by the New Economic Rights Alliance (NewERA).

Advocate Douglas Shaw argued the interdict was in the public's interest, and was urgent, as some home owners would lose their houses over the holiday period.

"It's extremely urgent and a matter of social importance," Shaw said.

Spilg rejected this, saying a high court interdict was wrong, as those facing foreclosure should seek relief individually, not as a group.

However, Shaw argued that it would be "highly difficult" for each applicant to approach the court as individuals.

Advocate Shem Symon, representing several banks, said notice of the urgent application had been improperly done. He argued that credit providers had the right to reclaim property if a loan went into arrears and this should not be ignored.

Spilg complained the application was being made on the last day of court for the year, with the filing given to him on Thursday night, over 1 000 pages long.

Spilg said that while NewERA's urgent interdict was dismissed, they would be able to bring their regular court case on January 28.

The basis of NewERA's complaint is that banks are bundling and selling loans to third parties on bond markets and stock exchanges through securitisation.

The group claims that a bank cannot foreclose on a person's assets if the loan has been securitised.

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property  |  debt



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