Tamil Selvi was devastated when she suddenly lost her husband S Chirtanthan in early 2021.
But she couldn’t grieve in peace because of a nightmarish twist triggered by the slip-ups of CIMB, which gave the couple a home loan 20 years ago.
Barely a week after her husband’s death, Tamil Selvi was faced with the shocking news that the house they were living in had been auctioned off by the bank earlier and had since belonged to someone else!
In 2001, Tamil Selvi and her husband took out a joint home loan of RM73,700 from Bumiputra-Commerce Bank Berhad (later acquired by CIMB Bank Berhad) to buy a house in Ipoh. They had pledged to pay their monthly installments but suffered a three-month default when Chirtanthan suffered a stroke and lost his job at the end of 2019.
With her income declining, Tamil Selvi struggled to pay the monthly installments of RM700 on her minimum wage of RM1,200 as a school cleaner, but her request for a reduction in installment amounts apparently did not go through. been accepted by the CIMB.
In February 2020, Socso declared her husband disabled and approved his disability pension. By this time, Chirtanthan’s physical and mental health had deteriorated considerably, forcing Tamil Selvi to take over the house payments.
Tamil Selvi informed Menglembu branch of CIMB about her husband’s status and forwarded his Socso documents to them. At the same time, she inquired about the use of mortgage reducing term insurance (MRTA) to settle part of the loan. The husband and wife had purchased the MRTA in 2001.
But bank staff could not locate the MRTA documents in the system, so the cover that applied for disability was never used to lend a hand. The MRTA could have more than covered their arrears.
But the worst had to happen. Despite all the challenges of 2020, the first year of the pandemic, the couple managed to pay most of their monthly payments, and even double the following month in the event of a monthly default. In September 2020, out of the blue, they received a letter titled “Pengishtiharan Jualan” (sale announcement).
As usual, Tamil Selvi took the letter to CIMB Menglembu branch to seek clarification.
The bank officer herself was taken aback by the auction notice, saying it was unlikely the loan could be seized for her arrears of just RM2,567. [the couple still had over RM40,000 of the loan to settle]. She advised Tamil Selvi and helped her convey her appeal to the bank’s headquarters.
There was no response, and Tamil Selvi continued to pay, and the bank continued to accept installments until her husband died.
Tamil Selvi’s husband passed away in February 2021. Five days later, she went to CIMB branch to inform them.
After consulting with their head office, the staff told her that she no longer needed to make any payments, as the house had been fully paid for.
Still in tears after her mourning, Tamil Selvi couldn’t quite understand what was going on, but either way it was good news. Maybe it was the MRTA kicking in, she thought.
However, that same night, the bank dropped a bombshell that continued to cause her unending distress and anxiety. An officer from CIMB headquarters called Tamil Selvi to tell her that she had to move, as her house had been auctioned earlier, and they needed her bank details to deposit the balance of the money.
Ten days later, Tamil Selvi received a letter from CIMB head office stating that the couple had “completed the term of the loan and settled all outstanding with the bank in full”. This corroborated what the branch had told him about no longer having to pay for the house. Was the house then still his?
Obviously, CIMB had made a big mistake. Even though it was the time of the pandemic when the government itself was advising banks to refrain from foreclosing on housing loans, it went ahead and auctioned off the house of a client who didn’t wasn’t a regular crook.
And it seems that the CIMB branch in Menglembu did not know that a department in their head office had decided to auction the house. As a result, Menglembu branch continued to reassure Tamil Selvi that all was well.
If the bank had kept proper records, it would have located the MRTA documents and would not have continued the auction process when the client was declared invalid by Socso.
Initially, the bank that gave them the loan was Bumiputra-Commerce Bank Berhad. It appears that CIMB never fully transferred the file during the takeover. Why should the borrower pay for the bank’s alleged lack of due diligence when taking over loans from another banking entity?
Tamil Selvi went to her local bank branch almost every month to pay the installments, but she was never informed that her house was being foreclosed.
Tamil Selvi would never have guessed as his payments were received by the bank without any problems. Will a client continue to pay installments if they know the home was being auctioned off?
Although the bank now claims otherwise, the only document they received prior to the auction was the announcement of the sale in September 2020 for the auction to be held in October 2020. But the branch estimated that a mistake had been made and helped her file an appeal with the bank’s head office.
Everything was calm after that, and Tamil Selvi continued to pay the monthly installments. Unbeknownst to her, the house had been sold at an online auction in October 2020, but the bank continued to accept her payments even after that.
Lawyers say there are strict laws governing auctions, an important aspect of which involves regular, documented communication with the person whose property is being auctioned. Tamil Selvi only received the announcement of the sale. No shocking phone calls, and none of the harassment she received on the phone after her husband passed away.
When a bank errs in this way, it has the opportunity to admit its mistakes, including:
- initiating foreclosure/auction process for default of approximately three months due to serious illness suffered by Chirtanthan (stroke)
- launch the auction process in the midst of the Covid pandemic
- failing to initiate the MRTA application when Tamil Selvi informed them of her husband’s Socso Disability Award
- giving incorrect advice when Tamil Selvi went to the branch with the letter regarding the auction
Doesn’t corporate social responsibility (CSR) require a bank to make a sincere effort to fix this series of mistakes?
Unfortunately, CIMB chose to deny everything and defend its actions, thus prolonging the misery of its own client, whom CIMB failed to serve appropriately.
Tamil Selvi is lucky that the buyer of his house was magnanimous. Tamil Selvi refers to her home as her temple, and she has a strong emotional attachment to it.
In view of this, the buyer offered to waive his claim and sell the house back to the bank. She decided not to deport Tamil Selvi and her daughters until the CIMB settles the matter. She offered to rent the property to Tamil Selvi and her family until the issue is resolved.
But CIMB chose to be arrogant and irresponsible*. A wealthy corporation – with pre-tax profits of RM5.3bn for the first nine months of 2021 – is making a huge mess and making a widow’s already difficult situation worse.
Instead of solving the problem by buying back the house and returning it to Tamil Selvi – minus any unpaid installments from him – she decided to use her financial power to justify her actions and defend herself. Shame on you, CIMB!
Note: Following protests and publicity in the media, a CIMB representative reportedly called Tamil Selvi and told him the bank wanted to help by contacting the new owner to see how that might resolve the issue.