By Pinky Khoabane
Marius Marais, CEO of FNB’s Home Loans & expert witness who lied under oath
AFTER years of delaying tactics by First National Bank, Judge Fortuin will finally hear the sordid stories of how the bank allegedly discriminated against Maria Magdalena Pietersen, Soon Boesak and Lucas Maarman.
The three represent thousands of low cost housing bond holders – all Black and living in townships – who took-out home loans with Saambou on the eve of democracy and whose accounts were taken-over by FNB when Saambou collapsed. These clients have accused FNB of charging them interest rates higher than those of their counterparts who hold high-cost home loans. The bank is also accused of denying the clients the benefit of interest rate cuts. When interest rates went down, only the high cost home loan clients received the cut – this in violation of the Usury Act. Furthermore, a large percentage of them were charged interest rates above the permissible amount in terms of the Usury Act. The case will be held in the Western Cape Equality Court in November this year.
In an affidavit, Pietersen stated that she bought her house in July 1995 for R61 000. The bank classified clients according to race and her loan had the internal code of PRO 86 which represented “black low cost housing,” the affidavit reads. By 30 June 2003, Pietersen was paying 4% higher than white bond holders due to the discriminatory practices of the bank.
By 31 January 2014, her debt was R96 173,02 instead of being in credit for R14 176,05 according to a calculation by Emerald van Zyl, the financial investigator who now represents the complainants. “The difference of R108 349.07 represents the total damages suffered by the Complainant as a result of the unfair discrimination,” her declaration continues.
Despite having effectively paid-off her house and the bank owing her money, FNB had no mercy when Pietersen fell into arrears. In an interview with UnCensored she said she had prayed often, asking God to assist her. She lived with her son and two brothers; one of them had cancer and the other was on a wheelchair. They have since died.
“First it was my son who passed away in February 2008. Then my brother in the wheelchair two months later. My brother with cancer went on 21 May 2011,” she said.
As if that wasnt enough, the bank hit her with another blow in 2013. She had filed a complaint with the bank that she had been overcharged as a result of the discriminatory practices of the bank, and had received a refund of R80 000 which was later overturned when she queried the amount. “I was devastated. Here I was thinking and knowing the bank said I had a balance of some R10 000 on the loan and suddenly because I had queried the refund and suddenly they came back and said they had made a mistake and reinstated the R80000. I thought I was going to die,” she explained.
Van Zyl claimed the bank’s calculation was incorrect and should have been approximately R108000 according to his calculation. It is this amount that Pietersen queried. The bank then had a change of heart seemingly and explained the refund of R80000 as a ‘mistake’.
Liliandah Chokwe was charged 21.5% on her home loan at a time when banks were allowed to charge upto 14% interest and no more. This was a shocking 7.5% more than was allowed in terms of the law.
The saga dates back to 1998/99 when FNB bought Saambou Bank’s low cost mortgage book.
Background to Saambou/FNB Saga
First National Bank bought Saambou’s home loan book when the latter collapsed in 2002. Although FNB obtained the mortgage book of Saambou for R1 after the bank collapsed on 9 February 2002, it obtained the Low Cost Housing mortgage book by securitisation in 1998/1999. This was confirmed by the Curator of Saambou, Mr T.J. Louw in his founding affidavit as follows: “On my date of appointment (9 Feb 2002) Saambou had directly or indirectly sold to other banks, mortgage loans to a value of approximately R 2.6 billion, all of which are now held by FirstRand Bank Limited”.
Emerald van Zyl said the statements of Low Cost Housing clients prove that FNB started to administer the Low Cost mortgage book from 2 February 1998. “The main discrimination started in February 1999. FNB was therefore the proud owners of the Saambou mortgage book of Low Cost Housing when the discrimination started. It is therefore responsible for the discrimination and should refund every low cost housing client, because they collected the illegal interest,” he maintained.
In 2005, FNB admitted to the dubious accounting practices of Saambou and moved to rectify the problem but a trio of forensic experts including Gregory Johnson, Dr David Klatzow and Van Zyl alleged that the amount FNB paid-out addressed only a fraction of the problem – just R154 million. Van Zyl went on to dispute FNB’s calculation – a matter which went to court and which he lost. Media reports at the time described van Zyl as a “long campaigner against the overcharges”. At the time, he was said to have stopped 164 sales in execution arising out of supposed arrears in the bond book FirstRand took over from Saambou. “Only two of the clients he has represented have been found to have been in arrears,” www.security.co.za. wrote.