Dora Ntwana worked as a nurse at Groote Schuur Hospital in Cape Town for most of her life. Five years before she could retire, she decided to use the housing subsidy which she was qualified to receive, and applied for a bond with Absa Bank. She bought her family's first home in 1992 for R60 000.
Although the house was old and had been vandalised, it was worth every cent to the Ntwana family. The children had grown up the hard way, having to live with various relatives as they grew up because they did not have their own home. To finally have a place they could call home was a huge accomplishment for Ntwana, and it gave her children that much more pride as they walked home after school.
In a letter to Personal Finance, Ntwana's daughter, Thenji, says: "Only a person who has gone to school without shoes in winter and on an empty stomach will understand what we went through. Our childhood was really tough; I don't want to think about it. So you can imagine how it felt when she managed to get a home for us. It meant for the very first time we were going to stay together as a family, something we never knew. It was a feeling I can never be able to explain. We had a HOME!"
Insufficient income
In 1997, Dora Ntwana retired. She received a lump sum pension amount of R12 000, which she paid straight into her bond account. However, she soon found that the meagre pension of R720 she received every month was not enough to meet her bond repayment and other expenses.
She went to the bank to declare that she was now a pensioner and could not afford her full bond repayment every month.
The bank consultant dealing with the case, a Mrs Hanson, arranged for Dora Ntwana to pay a reduced instalment of R700, which left her R20 to live on for the rest of the month. At this stage, Dora Ntwana's older children decided to try to help their mother.
Thenji Ntwana contacted Mrs Hanson to inform her that she (Thenji) would be taking over the bond repayments.
Mrs Hanson informed Thenji Ntwana that the account was in arrears due to the reduced repayments and that she should pay instalments of R1 281.97 a month.
Mrs Hanson asked Thenji Ntwana to tell her immediately if she had a problem making a payment. Thenji Ntwana started paying instalments of R1 300 and agreed she would inform Mrs Hanson if she was going to pay late.
Account transferred
In December 2002, Thenji Ntwana's own home was burgled. She was faced with repairs and found she could not meet her mother's bond repayment that month. When she telephoned Mrs Hanson, she was referred to a Mrs Williams (at the Absa branch in Bellville), who was now handling the account.
Thenji Ntwana says she was not given any prior indication that the account had been transferred to another department or account manager. Two months later, she paid R2 000 into the bond account in an attempt to make up for missing one month's instalment.
Then she was burgled a second time, in May 2003. Thenji Ntwana now had to seriously look at increasing security in her home.
She informed Mrs Williams that she would not be able to meet the repayments on her mother's bond for a few months.
Shortly after Thenji Ntwana resumed repayments, Dora Ntwana was shocked to receive a letter from Absa that informed her that the house was to be sold by auction.
Thenji Ntwana immediately went to Absa Bellville to discuss the letter with Mrs Williams.
"It was then that Mrs Williams explained that an arrear amount had accumulated because of the previous reduced repayment arrangement and told me the arrears were R17 000," she says.
At this stage, Thenji Ntwana was referred to Absa's lawyers, who referred her back to Absa. The bank again referred her to the lawyers.
The fate of her mother's home was in the balance and she was unable to get a straight answer from the bank as to what she should do.
Scramble for funds
Eventually, a Mrs Bailey, who worked for Absa's lawyers, told Thenji Ntwnana to write a letter and said she would try to sort out the problem. This was in September 2003 and the house was to be auctioned on November 2, 2003.
Thenji Ntwana made numerous unsuccessful attempts to talk to Mrs Bailey over the next few weeks. Eventually, she called Mrs Bailey in the last week of October 2003 and left a message for her. On October 31, 2003, Thenji Ntwana repeatedly called Mrs Bailey's office and finally got through to her that afternoon.
At about 4pm, Thenji Ntwana was told she could save the house if she paid R10 000 into the bond by 9am the following morning.
Thenji Ntwana frantically called friends and family to beg for a loan. Her brother and a family friend decided they would put up the funds using money borrowed through their credit cards.
The next morning, Thenji Ntwana's brother and the friend went to an Absa branch in Cape Town to pay the money directly into Dora Ntwana's bond account.
Thenji Ntwana went to the Absa branch in Bellville to tell Mrs Williams that she had the funds to put off the auction of the house.
However, her brother phoned to tell her that a teller at the Absa branch in Cape Town had just informed him that the bond account was already closed.
Home auction
Mrs Williams confirmed with Thenji Ntwana that the bond account number was valid and said she could not see a problem.
However, she refused to telephone the Absa branch in Cape Town to verify the account. She then told Thenji Ntwana to wait, went upstairs and returned to say the house had been sold for R63 000. Thenji Ntwana was not given any further explanation from the bank.
"I sat there in floods of tears. Everything was falling down around me. How was I going to tell my mother that her house had been sold?" she recalls.
Mrs Williams referred her to the new owner, Patricia Arendse, and advised her to ask Arendse to withdraw her offer to buy the house.
On hearing that there were two pensioners, both in ill health, living in the house, Arendse agreed that she would withdraw. But Arendse's lawyers informed her that she would forfeit her money if she did so. She then approached Thenji Ntwana with an offer to sell the house to the family for R200 000.
The Ntwanas were unable to buy the house back. They have since been evicted twice and the stress damaged the health of Dora and her husband, Hendson Mandini.
The couple was arrested for trespassing and, in February this year, Dora Ntwana won the trespassing case as the court found the house was still registered in her name when she was arrested.
The stress of being two old pensioners with nowhere to go, not knowing when they would be kicked out of their home, finally killed Mandini, Thenji Ntwana says. He died in October last year, aged 72.
"All he wanted to talk about was what was happening with the house," Thenji Ntwana says.
Absa has continued to send statements to Dora Ntwana, because she still owes the bank the arrears on the property. However, this served only to confuse Dora Ntwana because she took the statements to mean that she still owned the house.
The house has been sold twice more and each new owner offers to sell it back to the Ntwanas for a higher price. They were offered the house at the end of 2007 for R300 000.
Arrears still owed
Dora Ntwana turned 70 this year. She is still staying in her modest home in Mandalay, Cape Town next to Mitchell's Plain but fears she will soon be evicted.
Although she cannot afford it, Thenji Ntwana is paying the rent to avoid Dora being evicted. She has paid for the first few months of 2008 by dipping into the money she has saved for her son's education.
Absa spokesperson Deon Oosthuizen says the Ntwana account accumulated arrears of R26 990.78 over a period of seven years and the bank had no option but to repossess the property.
When Personal Finance asked Absa for more comment, we were told that "unfortunately, due to the unavailability of key spokespeople, we can not grant your request for such an interview".
The process used to repossess your home
If you are unable to pay the full instalment on your mortgage bond each month, the interest you are charged each month will start to exceed your monthly repayment.
Your monthly repayment should be more than the interest you are charged each month, and not the other way around.
If you default on a repayment, your bank will contact you, either by phone or SMS, to remind you that your payment is overdue. This is when you should contact your bank to discuss how you can restructure your loan or make alternative repayment arrangements.
However, if you continue to default on your repayments and do not contact your bank, it is likely your bank will send you a letter to remind you about the overdue payment.
If you still fail to pay after receiving the letter, you might find a collection agent, sent by the bank, knocking on your door to collect the money.
Section 129 notice
If you have not met your bond repayments for two to three months and have also ignored the letters and telephone calls from your bank, the bank is obliged, in terms of the National Credit Act, to send you a section 129 notice.
This notice will advise you to refer your mortgage bond agreement to a debt counsellor, an alternative dispute resolution agent or mediator, a consumer court or consumer tribunal, or the Ombudsman for Banking Services so that you can reach an agreement with the bank or develop a plan to bring your payments up to date.
It is in your best interests to choose one of the above options if you wish to avoid facing legal action by your bank.
The National Credit Regulator, which can refer you to a debt counsellor or any one of the other options, can be contacted on 0860 627 627.
Your bank is entitled to send you a lawyer's letter and may summons you to appear in a magistrate's court if you have missed a repayment for at least 20 business days and if at least 10 business days have lapsed since you received the section 129 notice and have not made arrangements to restructure your debt.
In court
When it takes you to court to seek a judgment order against you, the bank must show the court that you have either ignored the section 129 notice or you have rejected the bank's proposals to repay your debt.
In court, you will have an opportunity to oppose the repossession of your home. If you cannot show the court that you can afford to meet your repayments, the court will grant the bank a judgment order against you for the outstanding debt and your property will be attached by a sheriff of the court.
This entitles the bank to sell your property at auction. However, your home has not yet been repossessed. The bank will only buy back, or repossess, the property if it does not receive a reasonable offer at the auction.
Auction bid
Owen Sorour, the director of secured credit at Standard Bank, says the reserve price is determined by market circumstances and could be a lot lower than the outstanding balance on your bond.
The bank will have a representative at the auction but the representative will usually stop bidding once the price matches the amount you owe the bank.
The bank will buy the property only if it believes that it can obtain a better price, which covers all the costs of holding such a property, at a later stage.
If the property is sold at auction, the bank will use the proceeds to settle the costs of putting the house on auction as well as your outstanding mortgage bond. If the sale price at the auction is insufficient to cover your outstanding bond, you will still be liable for the difference.
The bank will blacklist you with the credit bureaus and you will have to make arrangements to pay off the outstanding debt.
This means it will be very difficult for you to obtain any kind of credit later on and you are unlikely to get another home loan for at least another five years or until your debt is paid off and your blacklisting has been cleared.
If there are any profits from the sale after the bank has met its costs and recovered the amount you owe, this money will be paid back to you.
Although the reserve price is set, if two people want the property and continue bidding, the auctioneer is likely to push for the highest price as his commission is linked to the price obtained.
Jan Kleynhans, the head of home loans at First National Bank, says repossession is a last resort for a bank because it is a costly process.
The costs incurred by the bank if it sells a repossessed property on auction include lawyers' fees, the costs of going to court to obtain a judgment against you, an auctioneer's fee and the sheriff's commission, he says.
In addition, if the bank then decides to repossess your home, there are further costs, such as transfer duty and paying a security guard to guard the property while it is unoccupied, Kleynhans says.