BoN implored to reviewoutdated loan policies

Niël Terblanché

Outdated home loan policies and procedures are contributing to impoverishing Namibians from all walks of life who are still struggling with the economic devastation brought on by restrictive government regulations during the height of the Covid-19 pandemic.

Advocate Richard Metcalfe in a letter addressed to the Governor of the Bank of Namibia, Johannes !Gawaxab, said he acts on behalf of numerous clients, who have been forced into a default situation on their home loans as a result of severe financial decline brought on by the Covid-19 debacle because of outdated bank policies and procedures.

In the letter, Advocate Metcalfe said such clients are subjected to the humiliation of having their homes taken away by commercial banks without any mercy through High Court proceedings. “The further corollary of such humiliation is that such clients become economic outcasts as they are blacklisted by being listed at the credit bureau,” he said.

He said the High Court has gone out of its way to amend such humiliation and loss of homes but the vast majority of homeowners who fall into home loan arrears cannot afford the services of legal practitioners to assist them in the High Court.

“The irony is that commercial banks pay astronomical legal fees to their legal practitioners to take homes away from decent and hard-working homeowners. Such legal fees are then simply debited from the errant homeowner’s bond account casting them ever deeper into the home loan debt debacle which ensures that they become economic slaves to commercial banks,” he said.

Advocate Metcalfe was of the opinion that a sense of injustice is evoked when an observer at the High Court witnesses up to six legal practitioners from one firm of lawyers attending to what is a confiscation without hope of homes by commercial banks.

“These commercial banks have no interest in even considering less drastic measures than the sale in execution of homes where home loan debtors fall into arrears. It also evokes a sense of stunned shock when the homes are bought, in most instances, by the commercial banks at the sales in execution for ridiculously low amounts. Such amount is then credited to the home loan and the home loan debtor must then be subjected to further economic torture by having to repay the remaining home loan amount,” he states.

He said the conspiracy of home loan debt default is then horribly aggravated by the commercial bank selling the home loan debtor’s home at a huge profit to the commercial bank and not crediting the home loan debt with such an amount.

The Bank of Namibia has extended relief measures by the Determination on Policy Changes in Response to Economic and Financial Stability Challenges (BID 33) following the fallout of the Covid-19 pandemic until 1 April 2024.

“The commercial banks, however, simply pay lip service to the BoN’s relief measures and continue to persecute home loan debt defaulters to the point of economic abuse,” he said.

Advocate Metcalfe pointed out that in South Africa, commercial banks go out of their way to assist homeowners where times are found to be tough.

He added that Standard Bank of South Africa Limited has an EasySell programme in place where no lawyers are needed by home loan owners who experience home loan debt problems.

Paramount to the programme is that any shortfall is financed by Standard Bank at zero interest for payment over a period of ten years after a proper market-related selling price has been obtained for the home loan debtor’s property with substantive discounts being given by Standard Bank South Africa Limited if there is a shortfall.

In addition, such home loan debt defaulters are not listed with credit bureaus.

“Justice and fairness cry out in Namibia for such a programme to be made compulsory in our country to avoid the present scenario where commercial banks are enriched by the economic woes and misery of home loan debtors,” he said.

Advocate Metcalfe said Namibians would highly appreciate it if the BoN could re-evaluate this injustice by commercial banks and the financial status of a lot of people would be improved if the central bank could compel commercial banks to adopt an equitable solution such as the EasySell programme available to home loan debtors in South Africa.

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