The R60 billion class action against the country’s major banks for repossessing people’s homes and selling them far below market value could be certified by the end of this year.

Once the class action is certified, it is hoped that things will run much faster and the banks will pay the hundreds of claimants who are now in dire financial need after losing their homes.

Advocate Douglas Shaw, who is representing the claimants, gave the assurance that he is doing what he can to obtain compensation for those who have lost their homes.

Shaw stated that in an attempt to expedite the process, they are also launching a volunteer project for people to help with the administrative elements.

While he is trying to get the class action certified as soon as possible before the Gauteng High Court, Johannesburg, there are many hurdles to overcome.

He explained that they must first face an objection by the banks regarding the structure of some of the affidavits filed by the claimants.

Once this technical argument is out of the way and there are no more hurdles, he will file his arguments in the main certification application and then await a date from the court about when it can be heard.

Shaw said it has been more than four years since they filed their application, but things are moving slowly as he alleged the banks came up with delaying tactics. Another reason for the slow pace is that the judge who had to oversee the matter was on a six-month leave.

Shaw said he believed that unreasonable damage had been done by the banks to these people.

“No one thinks what they (the banks) have been doing - in some cases selling homes for as little as R100 - is okay. They should pay these people back,” Shaw said.

According to him, the right thing to do for the banks is to pay the people in the class action as soon as possible and to come to an arrangement regarding those who are not yet part of the class action.

Many of these people had their homes auctioned off for as little as 10% of their market value, and have been homeless and destitute for over a decade while the banks recovered their debts.

Most of these individuals are poor and not able to recover their losses after losing their homes to banks such as Absa, Standard Bank, FirstRand Bank, and Nedbank.

Up to 2017, the banks were selling houses at sheriff auctions, without a reserve price, thus leading to substantial losses and the owners still owing large sums to the bank after the auction. In 2018, the court altered the rules to include reserve prices for properties to be sold by auction by a bank.

Shaw said things have improved since then, but some homes are still sold at lower than their market value. It is said that the banks sold the properties for substantially less than the properties were worth and not as a last resort.

He added that how the banks treat homeowners who fall in arrears is often ruthless and has in many cases ended in tragic outcomes.

The banks are opposing the application and they deny any wrongdoing. FirstRand Bank, in a sentiment shared by the other banks, said in its opposing papers that there is a notion that the banks sell properties on auctions recklessly and without regard to the property owners, which is “simply not true”.

FNB said it takes “every reasonable measure to avoid selling properties in execution”. The bank stated that consumers are told about their rights, such as that they may take a “payment holiday” if they fall in arrears and that they only revert to selling a property in execution as a last resort.

People who think they may qualify to join the class action can email bankssoldmyhouse@bankinglawadvisor.co.za (if their homes have already been sold) or now@bankinglawadvisor.co.za if their homes are in the process of being sold.

Cape Times

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R60bn class action against banks lauded