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homeloans
FNB takes up cudgel for Saambou clients
September 9, 2005 By Roy Cokayne Pretoria - First National Bank (FNB) is to take action on behalf of ex-Saambou customers who may have been overcharged interest on certain home loans prior to FNB's acquisition in 2002 of the Saambou home loan book. Saambou Holdings, the holding company of Saambou Bank, collapsed and was put under curatorship in 2002. Ed Grondel, the chief executive officer of FNB
homeloans, was unable yesterday to quantify how many ex-Saambou home loan clients had been overcharged interest or the total value they had been overcharged. However, he said the overcharging on accounts FNB had sampled ranged "between R100 and thousands of rands". The overcharged interest relates to the period from 1990 to 1999. Grondel said it occurred because Saambou Bank calculated interest monthly in arrears before it became a bank. He said that when Saambou became a bank in 1990, it was told by the trade and industry department that its method of calculating interest monthly in arrears was an incorrect practice and had to be changed. However, Saambou failed to react immediately to this directive and only changed the way it calculated interest on its home loans in September 1999. Grondel said FNB had identified the problem when it acquired Saambou's home loan book and informed the curator of Saambou Bank, who indicated that subject to legal certainty being obtained, these accounts would be rectified at Saambou's expense. He said FNB had acquired Saambou's traditional housing book, comprising 60 000 accounts and valued at R8 billion, and subsequently acquired about half of Saambou's low-cost housing book, which comprised a total of about 20 000 accounts and was valued at about R1 billion. Grondel said FNB also entered into an administration agreement with Saambou's curator related to collections on Saambou's "distressed book", which were home loan accounts at least three months in arrears and in various stages of legal action, such as sales in execution. He said virtually all the overcharged interest claims received to date by the curator related to Saambou's distressed book. Grondel stressed that it would be an complex, arduous and long process to determine which of the Saambou accounts had been overcharged interest. The curator placed notices in the media in September 2002 inviting claims from any potential creditors. But Grondel said only a very limited number of claims were received by the claims deadline at the end of last month and the curator recently indicated that he planned to settle certain of these claims. He said FNB believed it had now become necessary to act on behalf of those ex-Saambou customers who could have been disadvantaged by the incorrect interest calculation method but had not yet claimed. He said FNB would, on behalf of these ex-Saambou customers, forward applicable recalculated accounts to the curator, who had sole discretion regarding the legitimacy of claims and was the final decision maker on whether they would be paid. Grondel said ex-Saambou customers did not at this stage need to take action and would receive a letter shortly detailing the process that would be followed.
Source: Yahoo_News