The Tribune

The Bahamas Mortgage Corporation’s (BMC) arrears ratio continues to hover around 40 per cent, its chairman said yesterday, despite it adding $49.7 million in new mortgages to its portfolio over the past four years.

Senator Alex Storr, during his contribution to the 2016/2017 Budget debate, said that while the 40 per cent arrears rate was high in comparison to most other lending institutions, it would “certainly be worse” if not for the BMC’s “intervention” methods.

Mr Storr said that over the past year there had been a  “marginal increase”in requests for mortgage loan financing for homes and vacant land that had been sold via foreclosure by various banks and other lending institutions.

“Due to the increase in the Ministry of Environment and Housing’s home construction programme, loans were placed in the BMC’s portfolio in this regard. This is expected to increase in the near future as many homes are currently under construction for which loans are being processed,” Mr Storr said.

“The challenge continues with applications for loans from Bahamians who are heavily debt burdened or require a co-applicant to join in the application to assist in qualifying for the loan. Every effort is made to ascertain the true financial obligations of loan applicants.  This sometimes proves difficult given the absence of a formal credit reporting agency, which is vital in determining the true extent of the outstanding debt of loan applicants.

“The Corporation is currently in the process of reviewing viable options with regards to accessing funding to provide mortgages for the ongoing Government home construction programme.”

Mr Storr said that over the past four years, 201 government-initiated mortgages with a total value of $19.659 million have been placed in the BMC’s portfolio, and 237 privately-initiated mortgages with a total value of $30.094 million have also been added.

The Christie administration has provided a full amnesty for the surcharge which is now applied for late Stamping of conveyances and other documents for 90 days, and the application of a fixed penalty of 10 per cent of the applicable Stamp duty thereafter.

“One of the first matters that was presented to me as chairman of BMC was a list of over 100 persons whose documents were not stamped and were now expected to pay the Stamp Duty,” Mr Storr said.

“I asked our attorney to hold off on sending out the notification letters as I began correspondence with the minster of state for finance.  I was told that the other mortgage lenders had a similar challenge, and I would like to think that this exemption is in some small way due to my efforts.”