Ms Muturi said in court proceedings that she had by 2010 paid Sh8.4 million, but the mortgage lender was still demanding an additional Sh7.3 million.
HF went ahead to sell the two pieces of land in Kiambu that Ms Muturi, a stockbroker, had placed as security.
Mr Justice Ogola ruled that the bank levied irregular charges on the loan and that it was only legally allowed to demand a maximum of Sh6 million.
Mortgage lender Housing Finance Group (HF) has been ordered to pay a borrower Sh45 million as compensation for selling her home after levying irregular charges and penalties on a loan she took in 1998.
Justice Eric Ogola has ruled that HF was wrong to sell Scholastica Nyaguthii Muturi’s two parcels of land after the stockbroker had repaid more than double the Sh3 million she had borrowed from the mortgage lender in 1998.
Ms Muturi said in court proceedings that she had by 2010 paid Sh8.4 million, but the mortgage lender was still demanding an additional Sh7.3 million. She held that HF, at the time of filing her suit, had placed the total amount to be repaid at Sh18 million.
HF went ahead to sell the two pieces of land in Kiambu that Ms Muturi, a stockbroker, had placed as security.
Mr Justice Ogola ruled that the bank levied irregular charges on the loan and that it was only legally allowed to demand a maximum of Sh6 million going by the induplum rule.
The rule provides that banks can only recover a maximum of double the principal amount loaned to customers.
Ms Muturi moved to court after HF sold the second piece of land, with her home, for Sh16 million. She argued that the lender undervalued the property and that she had more than fully repaid her loan. Ms Muturi added that HF did not notify her of the planned auction.
The judge ordered HF to refund Ms Muturi the Sh16 million it sold her land for with 26 per cent interest.
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