Close to 100 homeowners risk losing their houses should they continue to default on loan payments to the Bahamas Mortgage Corporation, a senior official there has warned.
Up to May, the corporation’s delinquency rate stood at 29 percent, reportedly the lowest it has been in five years, but officials said this could mean a loss of approximately $2 million.
According to the corporation’s Managing Director, Rory Higgs, in many cases, the culprits are persons who are gainfully employed, but for whatever reason, do not view their mortgage payments as a priority.
“In cases where payments are due, persons have been deferring those payments to do other things like going away to shop, but we’re saying that that will no longer be permitted and that persons take their mortgage payments very seriously,” Mr. Higgs warned.
“Once we realize that they have those sorts of problems, we sit down with them and try to go through their budget to make sure that they take into account the income that they receive, their living expenses as well as their commitment to the corporation.
“As long as they put all of those issues into perspective, in most cases they would be able to adequately manage the funds they have. Whenever those commitments are not put into perspective, in most cases that is when they get into problems.”
The corporation has taken what it calls an aggressive new approach to recoup outstanding funds, which calls for placing notices in various news dailies as well as enforcing other policies.
“Accounts that are more than three months in arrears, we are now placing them with attorneys to initiate foreclosure,” Mr. Higgs told the Bahama Journal.
“We’re asking persons who are willing and able to make their payments to come in and bring their accounts up to date in order not to avoid repossession.”
Since its inception in October 1983, the corporation has committed more than $160 million towards the development and construction of units in the various government subdivisions and more than $134 million towards the financing of private projects.
Housing Minister Neville Wisdom recently revealed that this represents a total commitment of close to $300 million, which represents a total of 5,929 loans.
Of this figure, 3,186 were government initiated and 2,743 were private loans, he said.
But millions of dollars in default loans could significantly alter this picture.
“Although the Mortgage Corporation is operating with a significant profit – we are able to cover expenses and so forth – the drain of those loans not being paid could over time be disastrous and that is what we are trying to prevent at this point,” Mr. Higgs said
Minister Wisdom said initiatives have been put in place to shorten the loan application and approval process which has been reduced from eight to 10 weeks to approximately two to four weeks “in most instances.”
A database of all loans in process and loan assessments conducted has also been developed. Officials said this allow users to view the status of loan accounts or loan assessments at a glance.
By: Macushla N. Pinder, The Bahama Journal
