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Mortgage Company Was 'Near Bankruptcy'

By AVA TURNQUEST

Tribune Staff Reporter

aturnquest@tribunemedia.net

THE Bahamas Mortgage Corporation was headed to bankruptcy as a result of "reckless lending habits" under the PLP administration, chairman Dr Duane Sands said yesterday.

Dr Sands said that 65 per cent of the corporation's now-delinquent loans were created during the Progressive Liberal Party's five-year tenure and with Senator Shane Gibson at the helm.

The FNM senator's comments follow claims by the party that Dr Sands, supported by his administration, had ordered the "heartless" eviction of a family of seven.

Dr Sands citicised Mr Gibson for "capitalising" on the emotional impact of a family losing their home instead of sharing ownership of the root cause.

"A huge number of individuals were placed in a situation where they were granted mortgages that there was no possible chance for them to service the debt," Dr Sands said. "It created a situation whereby millions and millions of taxpayers dollars were squandered."

Dr Sands explained that the family - whose story was published in a newspaper - had been in arrears for five years, and, after "every possible effort" had been exhausted, a Supreme court order granted vacant possession to the BMC.

Last night, Mr Gibson challenged Dr Sands to produce evidence to support his accusations. He also urged the government to exercise greater care in the eviction process.

Mr Gibson said: "I challenge him to bring the proof to show where government ministers instructed staff to give mortgages to Bahamians who didn't qualify. Bring the cases, present the paperwork. Now if a person's circumstances change that's different but the (BMC) staff assess the clients and determine whether they are eligible."

While he said he did not have enough information on that particular eviction to determine whether it was a valid exercise, Mr Gibson cried shame on the government for not coordinating with other agencies to provide assistance to the ousted family.

"If you're a government senator, and you're about to put people on the streets, wouldn't you coordinate with social services?" Mr Gibson asked. "These are difficult times for individuals. You don't have people who have money and not paying - you have people that do it - but this family don't fall in that category.

"The government has taken a business position, but then a humanitarian position should have kicked in and said let's contact social services."

Mr Gibson referred to statements made by Dr Sands and Prime Minister Hubert Ingraham on the sidelines of the Mackey Yard subdivision two weeks ago. At that time, Dr Sands revealed that the BMC faced some $80 million in debt from more than 1,000 defaulted loans.

Acknowledging the delinquency rate as "unacceptably high", Mr Ingraham also advised the corporation to seek compensation from the Mortgage Guarantee Fund to cover delinquent mortgages insured by the Ministry of Housing.

Also highlighting the presence of such a fund, last night Mr Gibson called Dr Sands' statements an attempt to justify the government's position and said the BMC did not stand to lose as much money as previously stated.

The PLP senator maintained that the default percentage rose by more than 10 per cent under the FNM administration's 1992 to 2002 term.

"In 1992, the default percentage was less than 20 per cent. In 2002 when (FNM) left it was around 32 per cent and it was unchanged when we left office. It didn't increase," Mr Gibson said.

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