The Tribune

By YOURI KEMP

Tribune Business Editor

ykemp@tribunemedia.net

The Bahamas Mortgage Corporation (BMC) yesterday said it has received $27m in Hurricane Dorian-related insurance payouts on behalf of its borrower clients, and expects this number to rise.

Philip Haven, its managing director, said the taxpayer-owned mortgage lender expected to be contacted by around 75 percent of its mortgage clients in Grand Bahama and Abaco over damage inflicted upon their homes by the Category Five storm. He added that the claims processing timeframe should take around four days from the moment a request is made.

“We have over 1,000 clients in both Abaco and Grand Bahama,” he said. “We have heard from 537 customers, mostly from Grand Bahama. We expect, when Abaco comes on full stream, that number to escalate to approximately 770.

“The total number of [insurance] cheques we have processed was approximately 200, and that will also include whatever mobilisation the customer has requested or stage-payment. We have received approximately $27m in cheques from our insurance company, and the cheques are still coming in. We expect to pay out the entire amount that we receive with the exception of customers who are requesting that we pay out the remaining balance from the cheque received and send them the balance.”

Mr Haven spoke out after the Mortgage Corporation yesterday unveiled its Hurricane Dorian claim cheque disbursement processing system - a move seemingly made in response to criticism voiced by Grand Bahama-based homeowner clients during recent TV reports.

However, insurance cheques are always made out to the lender when a damaged property is acting as security for a mortgage loan. Banks and other lenders always want some control over the rebuilding and repair process given that their loan collateral and its value is at stake.

Their ultimate goal is for any building to be restored to its pre-storm valuation, and to achieve this lenders may seek to influence the selection of the contractor hired to carry out repairs to ensure the work is Bahamas Building Code compliant. They may also control the contractor payout process to ensure borrowers do not use all, or some, of the insurance proceeds to finance activities such as holidays and luxury goods/vehicles purchases.

Meanwhile Mr Haven, responding to concerns that the Mortgage Corporation does not have an approved contractors’ list, told Tribune Business: “We are going with any government-licensed contractor. What happened is that we didn’t want to put an approved list together because the government is already monitoring that requirement.

“But once you are government-licensed and government-approved, then we will work with you once you give us all the information we need.”

Detailing the insurance claims processing timeline, Mr Haven added: “So, let’s say someone walks in today with a payment request. Mortgage Corporation personnel have to go out and do an assessment. So, let’s say that assessment happens tomorrow and, once that inspection and assessment is done, then the inspector comes in and triggers the claims process.

“So what we are looking at should be four days, because they have to send it from Grand Bahama here to the Mortgage Corporation. As soon as we get it, we are processing it here and then we have a 48-hour turnaround time at the Mortgage Corporation. So we have two days to get it from Grand Bahama and another two days here at the Mortgage Corporation.”

The Mortgage Corporation is advising impacted Grand Bahama homeowners to complete and file a claims request directly with JS Johnson at its East Mall Drive, Freeport location. It also wants them to provide to at least one government-licensed contractor’s estimate for repairs or reconstruction, with supporting contractor documents that include business license, tax compliance certificate and approved builder’s certificate from the Ministry of Housing.

Homeowners then obtain an assessment by the Mortgage Corporation’s technical team, and payments - other than mobilisation (as necessary) - will be made in accordance with the contract following the contractor’s request and an independent Mortgage Corporation inspection. Payments will be made directly to the contractor.