News details

Ferreira defends Mortgage Corp. evictions

Ferreira defends Mortgage Corp. evictions

Romauld Ferreira.

Minister of the Environment and Housing Romauld Ferreira in the House of Assembly yesterday defended recent eviction exercises carried out by the Bahamas Mortgage Corporation (BMC) and painted a picture that some borrowers have failed to service their loans for decades.

But Opposition Leader Philip Brave Davis later called the actions “careless and heartless”.

Ferreira made his defense as he moved a resolution for the BMC to acquire four parcels of land for new headquarters.

The treasurer sold the land, which includes the old Ministry of Foreign Affairs building on East Hill Street, to the BMC for $10.

The BMC will bear the cost to renovate the 200-year-old building for $5 million, the minister said.

About 3,300 mortgagers at the BMC are in default of their loans, noted Minister of Health Dr. Duane Sands, who served as BMC chairman in 2012. Sands seconded the resolution.

Regarding the delinquent loans and eviction orders, Ferreira said, “Just like other financial institutions, the BMC aims to reduce the amount of bad loans on its books.

“When a borrower becomes delinquent in mortgage payments, the BMC first, pursuant to the Homeowners Act 2017, serves a demand letter requesting payment of the arrears in 30 days and inviting the individual to come and speak with them.

“If there is no response, within six months documents are prepared and a writ is served on the client to pay money owed.

“What happens then is that whether the BMC is waiting for court rulings or court dates, we are actively reaching out to these individuals to come and talk to the BMC, to speak with us.

“Most of them don’t. The fact of the matter is, from start to finish of this process, it varies between a year to two years from the initiation of the letters.

“[That is] more than sufficient time for persons to come in to the BMC [and] come to an agreement.”

The minister noted that when vacate orders are issued it’s always with ample notice.

“Do you know what is interesting?” he asked. “BMC, more than any other institution in this country, bends over backwards to accommodate its mortgagers.

“It shows more flexibility on extenuating circumstances and offers more generous timelines than any other financial institution.”

The minister then highlighted “several interesting cases that plague the BMC” which he said are a small sample of what the corporation faces.

He said that in October 2007 a client was granted a mortgage of $86,617.

“Today, the mortgage is past due,” he said.

He said that client had a $950 deduction with a local bank for a consumer loan and could not receive another deduction for their mortgage.

He said the client was granted 90 days to vacate and also received an extra 30-day extension.

“Another client was granted a mortgage in December 2009 for $98,888,” he continued.

“Today the client is past due by $86,286.07. It should be noted that the client never contributed a payment on the loan and when it was recommended that the client commit to salary deduction the client refused to do it.

“Foreclosure proceedings started on September 2015 and the client received the eviction notice in October 2017, two years later.”

Ferreira said another client was granted a mortgage of $84,008 in June 2003.

“Today the client is past due by $83,872.67,” he said.

“Foreclosure proceedings started in December 2015 and the eviction order granted in August 2016.”

He added, “In another instance, a client was granted a mortgage in May 2003 for $78,837.

“The client is pass due $76,965.42. Foreclosure proceedings commenced on April 2012.

“A vacate order was granted on December 2015. The customer was given four months to vacate in 2015 and additional time and refuses to pay anything towards the mortgage.

“This is a small sample, but they all read the same and it speaks of the reticence of some borrowers who refuse to pay their mortgage.

“I’d like to remind the public that BMC has a $4.2 million bond interest payment that they must service in order to meet their obligations.”

Share with Social Media