HOME LOANS
Why cheap bank repossessions will now be the exception
A judgment by the Johannesburg high court should make it impossible for banks to sell primary residences for a pittance on auction when consumers fall in arrears on their home loans. In terms of the ruling, creditors will only be allowed in exceptional cases to auction primary residences without a reserve price being set by a court, effectively making minimum selling prices the "default position", says Alexandra Ashton of the Legal Resources Centre and attorney for the Lungelo Lethu Human Rights Foundation, which was admitted as a friend of the court in the case. The banks argued that by setting a reserve price there would be less interest from prospective buyers and it would therefore make it less likely for a buyer to be found. The judgment, which was delivered on Wednesday, reads: "The allegation appears to be without foundation, but even if it is so, we can see no reason why the court cannot be approached for a variation of an existing order, making it more likely to find a buye...
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