By Junias Erasmus
In any caring society, there must be a fair balance between the power of financial institutions and the dignity of ordinary people. When banks and the legal system begin to act without compassion, families can lose their homes and feel like they have no voice.
This is happening in Namibia, where many people are losing their houses through legal property auctions, also known as sales in execution. These sales often take place without clear rules and are done at prices far below what the properties are actually worth.
This unfair practice is weakening people’s trust in the banking system and making the gap between the rich and the poor even wider.
It is time for strong and clear rules to guide how banks repossess homes and sell them. Banks are trusted to take care of people’s money, but in these auctions, some banks are allowed to buy back the same houses at very low prices.
Even worse, they are not always required to use the money from the sale to reduce the borrower’s debt in a transparent way. This raises serious concerns about insider dealing and weaknesses in the law that must be urgently addressed.
The root of the problem is that banks give loans based on the true market value of a house, but when that same house is sold in court, its value is based on old municipal figures, which are often outdated and far lower than the market price.
These municipal values are reviewed only every few years and do not reflect real prices. This causes great harm to homeowners who lose everything, and in many cases, still owe money even after the property is sold. This is deeply unfair and goes against the values of justice and dignity that should guide our nation.
This is the mechanism they use, simple, yet deeply troubling. It often begins by targeting elderly homeowners or individuals who lose their jobs due to various reasons. When these vulnerable borrowers miss a payment or two, banks refuse to consider any restructuring options and instead move swiftly to repossess the property. Within weeks, the home is back on the market, not at fair market value, but at a heavily discounted price.
This is not due to inefficiency but rather a troubling system of insider trading. The once-friendly banker quickly turns cold and procedural the moment a default occurs, and the client is reduced to a mere case number. Borrowers are referred to legal teams, where a calculated process unfolds: legal jargon, strategic delays, and limited communication ultimately lead to a court order.
When the property finally goes under the hammer at auction, the buyer is usually not a stranger but someone with inside connections, an associate of the lawyer managing the case or even a relative of the banker involved.
Namibia needs to act now. We must introduce a model that allows homeowners, young and old, to work with banks to sell their homes at fair prices before repossession becomes necessary. This would give families a chance to recover with dignity and avoid the emotional and financial trauma of forced auctions.
Such a system should not be optional; it should be part of our laws and must apply to all banks and financial institutions equally.
We cannot let our financial system become a tool of unfair profit. The world economy has faced serious challenges in recent years, and many Namibians are still recovering from the impacts of the Covid-19 pandemic and high living costs.
During times like these, it is not enough to stick to old rules that no longer serve the people. Banks must support development and be part of the solution, not add to the suffering of those in trouble.
We must be brave and act quickly. New regulations must protect not only banks’ money, but also the lives and homes of the people. Losing a home should be the very last option, not a way for others to make secret profits. Our country’s laws and financial systems must reflect care, fairness, and shared responsibility. If we do this, we will not only save homes, we will protect the hopes and futures of many Namibians.
Junias Erasmus works in the Financial Sector. He is a Management Scientist and Operational Researcher, a Strategic Scholar & a Motivational Speaker. This article is written in his personal capacity. For inquiries, contact him at Junias99@gmail.com
