The High Court has blocked Stanbic Bank from auctioning a house belonging to a former employee of a global agency over a loan of Sh72 million.
Justice Wilfrida Okwany allowed the application by Roseann Maina, blocking the lender from selling the house in Kiambu, pending the determination of a petition she has filed.
The judge at the same time directed Ms Maina to continue servicing the loan as per the agreement signed, except for a period of nine months that had been contested. She said the disputed period will form part of the issues to be determined during the hearing.
“In case of any default by the applicant, the 1st (Stanbic) and 3rd (auctioneer) defendants shall be at liberty to commence afresh and in accordance with the Land Act and the loan agreement, the process of exercising its statutory power of sale,” the judge ruled.
The bank claimed that the outstanding amount as of April stood at $690,677 (Sh81.7 million) and Ms Maina has refused to service it. The borrower said she took a loan of $610,000 (about Sh72.2 million), which had a condition that she must take insurance for domestic cover and mortgage protection.
She said she later discovered that she had signed up for insurance with Liberty Life Assurance despite requesting insurance with Sanlam Kenya.
She said she made payments on the insurance amount through her monthly mortgage repayments. The policy provided that in case she suffered from loss of income, the insurer would service the loan for nine months.
Ms Maina said she was retrenched in June last year and expected the insurer to repay the loan as agreed. She revealed there were several correspondences between her and the bank requesting confirmation whether the insurer would cover the repayment.
She claimed that the insurer requested information relating to her employment, including a formal letter of employment, information she says the bank ought to have sought before taking the insurance.
Ms Maina said she was served with a three-month notice in October last year, despite seeking clarifications. She challenged the notice, arguing it was not issued as required by law.
She said the bank later sought to auction the house for Sh71 million, which she says is extremely low compared to the current market price.
