The Lungelo Lethu Human Rights Foundation has condemned what it describes as a growing trend of banks swiftly taking legal action against homeowners, even in instances where borrowers are actively trying to settle their debts. The foundation argues that by burdening homeowners with excessive legal fees, the costs often exceed the outstanding loan amount, leaving families financially and emotionally devastated.

“People are losing their homes after paying off their bonds for 15 or even 17 years. Suddenly, after a few missed payments, the house is sold without any real effort to explore alternatives,” said the foundation’s President, Nkululeko Xhelithole.

According to Xhelithole, thousands of South Africans have had their homes auctioned in this way. “Before 2018, homes were sold at what we call 'footsteps', often at a fraction of what they were worth. After we took the banks to court that year, it was ruled that homes must be sold at market value. But the problems haven’t ended,” he added.

The foundation is at the forefront of a $3.4 billion class action lawsuit against several major SA banks. It accuses them of prioritising profit recovery over the rights and dignity of homeowners, and of failing to engage in genuine dialogue with clients before initiating court proceedings.

Calls are now mounting for regulatory bodies and lawmakers to intervene and provide stronger safeguards for homebuyers. The foundation says urgent action is needed to ensure that financial institutions are held accountable and that repossession is treated as a last resort, not a first response.

--ChannelAfrica--