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Residents Buying Homes Without Paying A Dollar Back

By KHRISNA RUSSELL

Deputy Chief Reporter

krussell@tribunemedia.net

THERE are “reckless” Bahamas Mortgage Corporation clients who have not paid one dollar toward home loans, Housing Minister Romauld Ferreira revealed, adding that in one instance a delinquency is 15 years old, dating back to 2003.

It is unclear if this is the most extreme case, but the minister told the House of Assembly there were many similar instances.

He painted a sober picture of the BMC’s financial state, which appeared to be pushed back in response to those who have castigated the government for evicting homeowners.

According to the minister, in many cases the corporation “bends backwards” in its attempts to accommodate borrowers with more flexibility than other lending institutions.

However, he said, most refuse to engage the BMC when they become delinquent, despite having “sufficient time” to do so.

Mr Ferreira spoke on the issue yesterday as Parliament debated a resolution for the BMC to acquire 2.91 acres of land where the former Ministry of Foreign Affairs is located on East Hill Street.

The BMC will relocate from its offices at Russell Street in Oakes Field because its needs and staff complement have outgrown the current facility. The cost of refurbishing and repairing the new location is $5m, money that will come solely from the BMC and not the government, the minister said.

“When a borrower becomes delinquent in mortgage payments, the BMC first, pursuant to the Homeowners Act, serves a demand letter firmly requesting payment of the arrears in 30 days and inviting the individual to come and speak with them, to talk, come to an arrangement where they could service their debts,” Mr Ferreira told Parliament yesterday.

“If there is no response within six months, documents are prepared and a writ is served on the client to pay monies owed. What happens then is that when 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. 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 for the initiation of the letter and the commencement of court, more than sufficient time for persons to come into the Bahamas Mortgage Corporation and come to an arrangement.”

He continued: “Mr Speaker recently the Bahamas Mortgage Corporation executed a number of these vacate orders and before I elaborate any further, let me advise that the BMC serves its orders as required by law, orders have to be served personally or by way of substituted service either be in the newspaper or at the address listed in your application. So when the vacate orders are issued its always with ample notice.

“You know what is interesting, Bahamas Mortgage Corporation more than any lending institution in this country bends over backwards to accommodate borrowers and shows more flexibility on extenuating circumstances and offers more time and more generous timelines than other financial institution even the one that the member for Exuma and Ragged Island is closely affiliated with.”

Mr Ferreira highlighted only a handful of cases where borrowers refused to cooperate with the BMC. He said there were many others that fit the same description.

“This is a small sample of what the employees of Bahamas Mortgage Corporation are faced with on a daily basis,” he said.

“A client was granted a mortgage in October 2007 for $86,617. Today the mortgage is past due. Notably during the course of the foreclosure, it was discovered that the client had a deduction from another local bank in the amount of $950 where the client refused to have a deduction made to the Bahamas Mortgage Corporation. As a result of the client’s financial situation, a deduction could not further be made because they committed to the $960 consumer loan after they entered into the mortgage arrangement.

“The client was granted 90 days to vacate and then also received an extra a 30-day extension. Meanwhile as this is going on, the Bahamas Mortgage Corporation was paying homeowner’s insurance.”

In another case, the minister noted a client was granted a mortgage in December 2009 for $98,888. However as of yesterday, the client is past due $86,286.70. He said this client never contributed a payment on the loan and when it was recommended that the client implement a salary deduction, the client refused.

Foreclosure proceedings started in September 2015 and the client received the eviction in October 2017, two years later, he said.

In another instance, a client was granted a mortgage in June 2003 for $84,008. Now this client is past due $83,872.67. Foreclosure proceedings started in December 2015 and eviction order was granted in August 2016.

He said the order stipulated that BMC work along with the customer.

Interestingly the client blatantly never paid a dollar since then. The writ was signed to vacate the home in May 2018.

“In another instance, a client was given a mortgage in May 2003, $78,837. The client is past due $76,965. Foreclosure proceedings commenced in April 2012 and the vacate order was granted December 2015.

“The customer was given four months to vacate in 2015 and additional time and refused to pay anything. Mr Speaker, this is a small sample, but they all read the same and speaks of the recklessness of some borrowers who refuse to pay their mortgages,” he said.

Mr Ferreira insisted yesterday that if the corporation wants to satisfy its obligations and pursue new loans, it must practice prudent fiscal management

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