The Tribune

By KHRISNA VIRGIL

Deputy Chief Reporter

kvirgil@tribunemedia.net

WITH the current legislative agenda set to end soon, the Christie administration introduced the Home Owners Protection Bill, touting its commitment to deliver relief to those affected by the Bahamian mortgage crisis.

State Finance Minister Michael Halkitis, who moved the bill in Parliament yesterday, said, when enacted, the legislation would be a major step forward in the rights of mortgagors in The Bahamas bringing them in line with rights that mortgagors receive in countries in this hemisphere.

He also revealed that 1,744 homeowners were deemed eligible for the government’s revamped mortgage relief programme, with 1,400 of these borrowers already contacted and 408 borrowers completing all of the requirements for enrollment in the initiative.

Mortgage relief and protection for homeowners were key planks of the Progressive Liberal Party’s (PLP) campaign before the 2012 general election. Mortgage relief was implemented early in this term; however the programme underperformed, leading Prime Minister Perry Christie to admit in 2013 that only four or five homeowners were expected to receive assistance.

Mr Halkitis said: “The affordability programme benefits those individuals who have an income and whose arrears situation can be cured through restructuring of the loan, through loan extension, principal or interest forbearance or interest rate reduction. Unfortunately for some individuals this would not be sufficient.

“The government is cognisant of this and the Home Owners Protection Bill is designed to address this deficiency. The bill also gives the borrower for the first time some inherent rights to select professionals to be used in the mortgage origination process.”

Some key aspects of the bill include: providing for the mortgagee to grant the mortgagor 30 days’ notice of his default in payment prior to starting legal proceedings; enables the mortgagee or a contributing member of his immediate family the right to apply to the court for relief where he is unable to satisfy his obligations; enables the court to allow time to the mortgagor of a dwelling house to remedy his breach of the mortgage covenant where an order of possession is being sought; it seeks to restrict the mortgage’s power of sale by requiring the mortgagee to give the mortgagor 30 days written notice of its intent to exercise its power of sale.

The bill also prohibits the sale of a mortgaged property to a party related to a financial institution, including employees and immediate family members of employees; provides exemption in stamp duty on the sale of property where the mortgagee sells the property under a power of sale if that sale takes place within five years of the last advance made by the mortgagee under the mortgage.

It further limits the mortgagor from charging the mortgagee for any amount of stamp duty beyond the amount of the duty payable after exemption; enables those purchasing a home to retain lawyers, appraisers and insurance brokers of their choice subject to certain conditions; allows for the transfer of mortgages between financial institutions at no cost to the mortgagor; seeks to prohibit excessive salary deductions.