The Tribune

By LAMECH JOHNSON

Tribune Staff Reporter

ljohnson@tribunemedia.net

A FORMER Bahamas Mortgage Corporation chairman yesterday called on executives at the National Insurance Board (NIB) to look carefully at the proposed investment announced by the government to borrow millions of dollars from NIB to construct over 100 homes.

Speaking to The Tribune yesterday about the construction plans during the recent signing of a Memorandum of Understanding between the Ministry of Environment and Housing, NIB, the Ministry of Finance and the Bahamas Mortgage Corporation (BMC), Dr Duane Sands claimed that the current “investment” would be putting pensioners and taxpayers at risk.

“I think the people at NIB should look critically at this so-called ‘investment’ that the government has proposed,” he said.

“With the plan that they are doing, they are putting the future of many pensioners and taxpayers at risk, unless the government can demonstrate that this is a good investment, and there is a good return on the public’s money.”

Last Thursday, a Memorandum of Understanding (MOU) was signed between the four entities for construction of more than 120 homes. Kenred Dorsett, Housing and Environment Minister, said the “initial tranche which is governed by the MOU is in the amount of $10 million to be drawn down over a period of 12 months in quarterly equal instalments.”

“The manner in which it is to be repaid is through securitization of the BMC’s mortgage portfolio and what happens is the funds are lent through NIB to BMC and BMC provides it for the purpose of the housing programme.”

“There is a credit given back to BMC as they turn these pass through loans into mortgages and then BMC will in turn satisfy through interest payments in the interim and in the long term through securitization of the BMC portfolio which is what we are working with the Ministry of Finance in respect of,” said Mr Dorsett.

Yesterday, Dr Sands’ caution about the $10 million investment stemmed from the failure of the government’s $10 million Mortgage Relief Plan to help homeowners that were in arrears of their mortgages.

“While I acknowledge that NIB has a certain social responsibility to fulfil, at the end of the day, it has to run itself a fiscal prudence and in a responsible manner.”

“And for the government that has promised so much and produced so little in return to now go and take money out of NIB as if it’s a slush fund just to pursue its political end, is just tragic.”