Watchdog body gives Sisulu nodSowetan - 21 July 2004 The Ombudsman for Banking Services - an institution ensuring fair settlement of dispute involving the public and banks - has lauded Housing Minister Lindiwe Sisulu's solution to home loan defaulters in Protea Glen in Soweto as being "innovative". Advocate Neville Melville praised "the balanced approach of the minister in making the deal conditional on the defaulters continuing to make payments to the banks"."While the minister took a compassionate approach, she nevertheless did not lose sight of the legal rights of the banks and the need for a stable economic environment," he said. Sisulu on Sunday offered RDP houses in Doornkop outside Soweto to residents who were evicted from their homes for not paying their home loans. Sisulu said she would meet with the banks to ask them to invest in low-cost housing but also needed people to understand the implications of signing house bonds. Melville said: "the Ombudsman for Banking Services receives a steady trickle of similar complaints from various areas, many of the complaints being those referred to it by the Gauteng consumer affairs department." He said cases where legal acton has started or the bank has obtained a judgement against a defaulter, the complaint would fall outside OBS' juristiction. "Occassionally, a bank has been prepared to restructure the loan or accomodate th homeowner in some other manner." "In some instances, where there was found to be some maladministration on the part of the banks, houses have been returned to persons who have approached the OBS for assistance." Melville said although they could sympathise with a family about to lose it's home, "one cannot ignore the imperatives of respect for legal process and for the rights of lenders". The Code of Banking Practice provided for banks to try to be understanding towards borrowers experiencing financial difficulties. "Those borrowers are, however, expected to play open cards with the bank as soon as they realise they are running into difficulties," the statement said. The OBS said mortgage-related problems had recently outnumbered ATM-related complaints as the main type of complaint it delat with.
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