The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading businessman yesterday pledged that his effort to revive the Government’s Mortgage Relief Plan will have “a far higher probability of success”, suggesting the first attempt failed because the banks “didn’t know their reality”.

Franklyn Wilson, the Arawak Homes and Sunshine Holdings chairman, told Tribune Business that any Mortgage Relief Plan he devised would be “more comprehensive”, and “look very different”, from the initial model.

Confirming that Prime Minister Perry Christie had personally approached him to lead efforts to revive the scheme, Mr Wilson suggested his prospects for success were better due to events over the past two-and-a-half years.

He explained that all parties were aware of the “huge problem” the Bahamas’ $700 million worth of past-due mortgages were creating for the banking industry, and wider economy and society, thus making them realise that a workable Mortgage Relief Plan was “in the national interest”.

Mr Wilson suggested that the first version, which was billed as being able to assist 1,000 delinquent mortgage borrowers, failed miserably because Bahamian commercial banks did not understand the true financial position of their clients.

Part of his work, he added, is “to understand what went wrong”, and why the first Mortgage Relief Plan’s outcome was “so different” from expectation.

“I have accepted the invitation of the Prime Minister to look at this matter dispassionately, and in the first instance to develop a clear understanding of what went wrong, what happened and why the real result was so different from the anticipated result,” Mr Wilson told Tribune Business.

“We have done some of that, and have some views as to why that is. We have had a few conversations with leaders in the banking industry, and the view is to take another look with a higher degree of objectivity, and more dispassionately.

“I am engaged in an effort to seek to ensure that the Mortgage Relief Plan has a different ending from where it presently is.”

Mr Wilson is becoming something of a ‘troubleshooter’, and the Christie administration’s ‘go to’ person when it comes to resolving potentially insurmountable economic policy issues.

He has already established a reputation for ‘success’ in this area, having led the negotiating team that secured the ‘2 per cent BTC Foundation’ deal with Cable & Wireless Communications (CWC).

A Mortgage Relief Plan was one of the core campaign promises made by Mr Christie and the Progressive Liberal Party (PLP) in the run-up to the 2012 general election, many independent observers viewing it as a significant factor in their victory.

Its failure, though, left the Government in a position of having massively over-promised, but hugely under-delivering, with less than 10 delinquent homeowners able to qualify for a plan billed as bringing relief to some 1,000 borrowers.

“One thing is clear,” Mr Wilson told Tribune Business yesterday. “The initial effort was not thought through enough, and not thought through in particular because the banks did not know their reality.

“The banks told the Government that if it did such and such, they could help 1,000 people. It ended up helping 10.

“That information was not based on information the Minister of Finance picked out of the air. How could the banks have been so wrong?,” he questioned.

“We’re looking at all these types of issues, trying to get a real understanding of what the issues are.”

Bahamian commercial banks said at the time that few of their delinquent mortgage clients met the qualifying criteria for the Mortgage Relief Plan, as many were highly leveraged due to salary deductions and other loans they previously knew nothing about.

Mr Wilson also said many in the commercial banking industry lost sight of the Mortgage Relief Plan’s all-round potential benefits because they were more focused on “resisting” the proposed Homeowner’s Protection Bill.

This legislation would have radically “restructured the rights of mortgage holders” in their favour, and ‘tilted the scales’ away from the banks.

And Mr Wilson yesterday suggested that talking to the Clearing Banks Association (CBA) as a group, as the Government did over the first Mortgage Relief Plan, had been a tactical mistake.

“It has its limits. As a matter of tactics and strategy, we will go about it very differently,” he said, explaining that the goal was to now engage commercial banks on an individual basis to tailor a scheme that suited their specific needs.

“I’m committed to do the best I can, and to see if we can come up with some ideas in consultation with persons in the banking industry to try and do something in the national interest,” Mr Wilson told Tribune Business.

“There is more acceptance that creating a Mortgage Relief Plan is in the national interest, as opposed to a partisan political agenda. That sets the stage for more meaningful discussions.

“To the extent there is a Mortgage Relief Plan, it’s highly likely it will look very little, if anything, like the last initiative,” he added.

“It will look very different, and if anything will be more comprehensive and have a far higher probability of success. The Prime Minister has spoken to me, he has done certain things to set the table for me, and I will do the best I can.”