The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE United Democratic Party’s (UDP) leader yesterday described legislation designed to protect delinquent Bahamian mortgage borrowers as “a deception” and a “farce”, and accused the Government of breaking its consultation promises.

Gregory Moss, in an open letter released yesterday, described the February 10, 2017, draft of the Homeowners Protection Bill as “nothing short of a disgrace”, arguing that the Government was failing to sufficiently protect the Bahamian working and middle classes.

The Marco City MP, who unveiled his own version of this legislation via a private members’ Bill in December 2015, also hit out the Government’s failure to incorporate any of his proposals into the Homeowners Protection Bill.

He added that the Government’s legislation merely continued the favoritism shown to mortgage lenders, such as commercial banks, and “abandoned homeowners to the greed and caprice” of these institutions.

Mr Moss, in a letter to the Ministry of Finance’s financial secretary, Simon Wilson, said it was “regrettable” that he was not asked to help with the Homeowners Protection Bill’s drafting.

Expressing particular disappointment that no provisions from his own Mortgage Relief Bill had been included in the Government’s legislation, Mr Moss’s comments imply that Prime Minister Perry Christie’s public pledge to consult with him has not been fulfilled.

Addressing the 26th annual Bahamas Business Outlook conference last month, Mr Christie had said: “We will try as best as we can to introduce, before the end of this term, the Home Owners Protection Bill.

“We’re supposed to have consultation with Greg Moss, the Marco City MP, who put forth a Private Members Bill.”

Mr Moss was even more forthright on the legislation’s supposed shortcomings. He charged: “As drafted, the Bill is merely a restatement of the existing egregious and inequitable provisions of the common law which have operated, and continue to operate, exclusively in favour of lenders, to the detriment of Borrowers, with the only material change to be effected by the Bill being the enactment of a new Stamp Duty exemption provision for the benefit of lenders.

“That is unfortunate and disappointing in the extreme, and is nothing short of a continuation of the policy of the various governments of the Bahamas of abandoning homeowners to the greed and caprice of the lenders.”

However, a close inspection of the draft Homeowners Protection Bill indicates that it is heavily weighted in favour of the borrower, with the courts able to intervene when the lender seeks to either ‘foreclose’ or sell their home/business via the mortgage’s ‘power of sale’.

The Bill requires lenders to give delinquent borrowers 30 days’ notice before either invoking their ‘power of sale’ or seeking a court-approved foreclosure.

In both cases, borrowers can apply to the Supreme Court for relief. On the foreclosure process, the court can either adjourn, stay or suspend the matter if it believes the borrower will be able to pay principal and accrued interest within six months.

As for the ‘power of sale’, the latest version of the Bill allows the court to postpone this for “a reasonable period where a sum equal to at least one half of the principal, and accrued interest, has been paid at a specified time”.

The Homeowners Protection Bill is also designed to give borrowers more ‘freedom of choice’, through an ability to select their own attorney and appraiser from a list provided by - and approved by - the lender. Borrowers will also be able to select their own insurance broker/provider.

Bahamas-based mortgage lenders typically direct borrowers to use certain attorneys and insurance companies, so any efforts to improve ‘freedom of choice’ are likely to be welcomed by consumers.

Still, an unsatisfied Mr Moss blasted: “I reject this Bill in its entirety as an exercise in deception, and an attempt to preserve the status quo which has led to thousands of homeowners losing their homes; to the stagnation of the construction industry as a result of a glut of homes on the Bahamian market; to the greatest transfer of wealth from the working poor and the middle class to the rich that this country has ever seen; and to the abandonment of the trust of the Bahamian people, who had entrusted successive PLP and FNM governments with a mandate to grow and protect the working and middle class.

“I am sorely disappointed in this Bill, and in what has now been shown to have been merely a pretence that there would have been an attempt to reach a bi-partisan consensus on the drafting of a true Mortgage Relief Bill that would have brought meaningful relief to thousands of Bahamians who are in the midst of challenging economic times through no fault of their own.”

The Marco City MP continued: “After all that our poor and middle class families have suffered through, and continue to suffer through, as a result of the failure of successive governments of the Bahamas to grow our economy, and enact meaningful consumer protection legislation, this Bill is nothing short of a disgrace.”

Mr Christie, during his Business Outlook address, said the Homeowners Protection Bill was designed to complement the Government’s Mortgage Relief Plan, together with changes to the Financial and Corporate Services Providers Act and rules for money lending.

“This compendium of legislation will introduce, for the first time in the Bahamas, clear rules around the entire mortgage process - from mortgage origination to foreclosure,” he said. “It will also discourage irresponsible practices which have contributed to the mortgage crisis.”