The Tribune

THE government reaffirmed its commitment to bring mortgage relief to homeowners in arrears and facing foreclosure yesterday.

The Christie administration will lobby for leniency with institutional lenders on individual cases despite reported international and local scepticism of their Mortgage Foreclosure Plan.

"The plight of homeowners in financial distress must be addressed if a stronger economy is to be restored," it was asserted in the Speech from the Throne.

"My government will therefore work with the clearing banks and other institutional lenders to develop a financially sustainable mortgage relief programme aimed at assisting distressed homeowners in saving their homes from foreclosure.

"Participation in such a programme would be voluntary," Prime Minister Perry Christie said in the speech.

The mortgage relief plan seeks to strike an agreement with banks and institutional lenders to write off unpaid interest and fees for homeowners facing foreclosure in return for government guaranteed interest payments for five years.

The proposal also includes working with banks and lenders to implement a 120-day moratorium on foreclosures and extend the loan repayment period under defaulting mortgages.

Moody's, a leading Wall Street firm, said the Christie administration's plan undermined efforts to rein in the $4.356 billion national debt, and warned that the scheme will likely cost Bahamian taxpayers $250 million to implement.

However, Minister of State for Finance Michael Halkitis said Moody's credit agency did not fully understand what the government intends to do, and had based its report on "erroneous" assumptions.

In an interview earlier this week, Mr Christie said his administration also plans to meet with Moody's to discuss the top Wall Street credit agency's scathing review of the programme.