Open letter to South Africa’s students‚ universities and government‚ represented by Minister in the .
EING blacklisted makes desperate consumers do the unthinkable to get money - and that works to their disadvantage in most cases.
It is extremely difficult to get finance if you are blacklisted and consumers are often ripped off by companies that say they can help.
Consumer Line has been inundated with complaints from people who had bad credit records and could not get finance, but who thought they could bypass the system with the help of institutions that disregard the National Credit Act.
Daniel Mollo owes R99000 for a loan he has never received.
He wanted to renovate his house so he took a loan that has now been transferred to someone else's name. This will remain so until Mollo pays back the advanced loan amount.
He said he responded to an advertisement by Brusson Finance. He called their offices and was faxed an information sheet that explained how the y operated.
They said they helped homeowners with blemished credit records secure finance by using a portion of the equity on clients' homes.
This is what Mollo wanted to hear. He was told that he could live in the house until the debt was paid.
Mollo thought t Brusson Finance gave blacklisted consumers a second chance.
"I was lured into it because I had wanted to renovate my house for a long time and could not get finance anywhere," Mollo said.
He had no idea that the deal would be to his disadvantage.
His house was transferred to Daniel Mareme and Jane Matjila.
This was against the agreement reached by the Banking Council, Provincial Housing Board (PHB) and Servcon Housing Solution, which manage repossessed properties.
Mollo and his successor in title cannot sell, transfer, mortgage or otherwise alienate the property for five years after its conclusion.
The bank repossessed Mollo's house and it was resold to him on condition that he did not sell, transfer, mortgage or otherwise alienate it. If he did he would have to relinquish the privilege awarded him while under the Servcon programme.
He realised this in April and asked Brusson's attorneys not to process his application until January 2010 when the prohibition would fall away.
They agreed, Mollo said.
He said he was shocked when KGL Attorneys told him that his loan amount had been deposited into his account and he had to start repaying it.
"I almost fainted when my bank statement showed that KGL Attorneys deposited R4000 into my account for a loan I had stopped," he said.
On enquiry they told him they had paid R25800 to the PHB, had settled his outstanding R67697 of the balance on the loan at the bank's sale of execution and reimbursed R28127 for expenses incurred on his repossessed house.
Mollo has to wait until January 2010 to either sell, transfer, mortgage or otherwise alienate the property when he will be freed from paying these debts.
He believes KGL Attorneys have not considered his interest.
"I now have a loan I never received, my house is no longer in my name and I have forfeited R121000, which I was exempted to pay."
Mollo blames Maxine Fernandos of KGL Attorneys for processing his application though they could have stopped the process.
"I just don't know why she processed it," Mollo said.
Fernandos confirmed that she had received Consumer Line's enquiry, but could not comment because her boss had to approve her response.
How Brusson Finance works.
l They don't offer loans, but a process whereby a home owner can convert a portion of the financial equity in his or her property into cash.
l The property is then sold to a Brusson partnership investor for the outstanding amount on a bond, together with all outstanding municipal clearances.
l The property is registered into the investor's name for five years while the "loan" is paid.
l Monthly interest is calculated are 6,56 percent higher than the prevailing standard mortgage prime rate.
l To protect a client, the deed of sale is endorsed.
l Brusson undertakes to stand surety for clients so that investors are never at risk.
l If a client omits to repay, they are given limited time to pay and if they still fail to pay, it results in the immediate cancellation of a deed of sale and they lose their property.