In most circumstances, banks only loan money where payment of the loan is to be secured by way of a mortgage bond registered over an immovable property.
If the lender defaults on payment of instalments in terms of the loan, the bank will be entitled to claim payment of the outstanding amount and interest thereon.
In certain circumstances, the bank will be entitled to foreclose on the property over which the mortgage bond is registered.
In other words, the bank will be able to get a judgment against the lender for repayment of the loan amount and will furthermore will be able to sell the immovable property in order to satisfy the said outstanding amount.
Where the immovable property is a lender’s primary residence, the bank will have to go to greater lengths to show to the court why it would be in the interests of justice to sell the property.
The bank will also, in most circumstances, be ordered not to sell the property for less than a specific amount.
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