Home Loan Account
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When the complainant settled his home loan, he was advised by the bank to keep the account open and active for insurance and future borrowing. Three years later, the bank told him that he had a credit of R40 800. He advised that he was unemployed and could not afford a loan.
On being reassured that it was not a loan, he transferred the amount from his home loan account to his personal account, from where he withdrew and used the funds. The transfer caused his home loan account to reflect a balance of R40 800 owing. He made no payments toward settlement of the newly created debt.
The complainant claimed that he did not know the money was coming from his home loan account, did not realise he would again owe funds on the account and that a proper credit assessment was not done before he was granted access to the funds. He asked the bank to suggest a repayment arrangement that would allow him to keep the house.
The complainant's account had an 'available transfer scope' because of a lump sum payment made to settle the bond, which placed the home loan account in advance.
With the account being in advance, the funds paid over and above what is due at that point, automatically became available. This is because the debt was settled before the repayment term of the original loan agreement had expired.
Home loans have a specific term detailed in the loan agreement. The client is entitled to make additional payments or settle the outstanding balance owing on the home loan sooner than the term end date. The additional funds paid into the account are available at any stage, depending on the amortisation curve, which then becomes indicative of the available transfer scope. There is no reason for a client to complete a new loan agreement with the bank to withdraw these funds.
When the complainant made the once-off payment, he did not request cancellation and closure of the account, which left the account active for the loan term.
It was found that the complainant personally transferred the funds from the home loan account to his personal account electronically so he could not claim that he did not know where the funds were coming from. The home loan account reflected a balance owing immediately after the transfer and the bank sent him quarterly statements that showed the new balance owing.
The complaint was not upheld.