The Tribune

By RICARDO WELLS

Tribune Staff Reporter

rwells@tribunemedia.net

NEWLY-appointed Free National Movement (FNM) Senator Dr Duane Sands yesterday called the Christie administration’s new mortgage relief plan a “re-imagining of an already failed political ploy”.

Dr Sands said the government should have put more effort into its plan, insisting that the “handout approach” would not solve the issues of in the mortgage system.

The former Bahamas Mortgage Corporation chairman suggested to The Tribune that the government’s re-tooled initiative bypassed the reality that the country’s current economic environment does not allow for its long-term success.

While admitting that the flaws within the country’s mortgage system are not easy fixes, Dr Sands said the government’s refusal to be honest about it shows that the Christie administration was only attempting to present “temporary hope”.

“Conceptually, everyone feels for those persons that are in this position because no one deserves to lose a home they have worked to afford,” he said.

Dr Sands implied that country was “well past” the tipping point in terms of the way loans are approved and handled.

He further suggested that the government’s new plan would only pass the buck from one generation to the other.

“Persons are approved on terms that are fiscally irresponsible and our economy is being propped up with this facade. Once they are approved, then the realisation sets in that this person is one or two bad moves away from a mortgage crisis.

“I am not terribly excited or impressed by the Prime Minister rolling out the identical promises he did during his 2012 campaign speeches. His plan then, as it is now, doesn’t address the issues surrounding the billions of dollars we have in non-performing loans.”

He added: “Pouring up to $5m per year, $20m over four years, into a fund doesn’t arrest the problem. Nor does hinting at fiscal responsibility in the realm of borrowing. There needs to be fiscal responsibly on the end of lending and a tightening of the belt on behalf of the government.”

During his budget communication on Wednesday, Mr Christie said the revamped programme will provide financial incentives that will allow banks to offer borrowers who have some ability to pay, but have fallen behind, the chance to get back on track.

“According to initial estimates, upwards of 1,000 delinquent borrowers, which are persons who are 90 days or more in arrears as of May 1, 2016, are anticipated to qualify initially for the mortgage relief programme. That number could, of course, go higher,” Mr Christie said.

The Prime Minister, however, did acknowledge that the programme would not address the root cause of the mortgage crisis in the Bahamas, nor does it provide a guarantee that persons who may fall into financial difficulty are afforded a duty of care by their lender with respect to their home.

In that regard, he said the government was also discussing with the Clearing Banks Association guidelines on how to treat delinquent mortgagors.

Addressing the lack of clarity, Dr Sands said: “This is the issue. (Mr Christie) doesn’t make it clear who gets what, how this all would work. All this is, is an election-year, pork-barrel, politicking plan.

“He should have been honest and tell the public that the system has its flaws and point out how the government would work to correct those issues. This is built on the gimmicky nature of politics. We have seen this all before and the Prime Minister is looking to sell hope while reality paints a different picture.”

Mortgage relief was one of the PLP’s major talking points during the 2012 election cycle as scores of Bahamians were faced with losing their homes amid one of the worst economic downturns.

Shortly after being elected to office, the Christie administration introduced its first mortgage relief plan. At the time, 4,000 homeowners were in mortgage payment arrears and that year, State Minister for Finance Michael Halkitis said around 1,000 people would likely qualify for help under the plan.

However, in May, 2013, Mr Christie told the House of Assembly he expected only “four or five” homeowners to benefit from the scheme.