The Tribune

The Christie administration’s revised Mortgage Relief Plan does not make much sense “on the face of it”, according to the Opposition’s finance spokesman, who questioned what return the Government would get for its $20 million ‘investment’.

K P Turnquest said: “I need to read that again because it didn’t make a lot of sense to me. He didn’t make it clear whether this was the Bank of the Bahamas or all clearing banks. We were trying to get some clarification as to exactly who is signing up to this programme.

“It appears that, as he is suggesting, they are going to put $20 million into this programme to offset or to pay for the renegotiating of mortgage payments for home owners so that their principal or mortgage payment will be reduced.

“I don’t understand how that works because, at the end of the day, it is a function of the cost of the mortgage, the interest rate and the number of years that determines the payment,” he added.

“Is he saying that they are going to pay a portion of the principal or are they going to pay some balloon payment up front so that their interest rate comes down? That’s the only way you get the payment down; either you’re going to reduce the interest rate or extend the number of years. What is this money supposed to do?”

During the 2016-2017 Budget communication, Prime Minister Perry Christie said the Government had designed a “comprehensive” mortgage relief programme in collaboration with the Clearing Banks Association (CBA) to assist delinquent borrowers.

“The programme will provide financial incentives that will allow banks to offer borrowers who have some ability to pay, but have fallen behind, the chance to get back on track,” said Mr Christie.

“Subject to program eligibility criteria, banks will offer qualifying borrowers a minimum 20 per cent -25 per cent reduction in monthly payments.

“For their part, borrowers will be required to attend a financial counselling program that will be established and run by the Government.”

Mr Christie added that based on initial estimates, upwards of 1,000 delinquent borrowers, meaning persons who are 90 days or more in arrears as at May 1, 2016, are expected to qualify initially for the programme.

“I think most Bahamians would have to question how they are going to use tax dollars to help an individual to reduce their monthly payment without some form of compensation for the Bahamian people,” Mr Turnquest said.

“How do we get a return on that money? We want to be careful because we certainly want to assist as many Bahamians as we can maintain their homes, but by the same token I don’t believe Bahamians ought to be saddled with private mortgages.

“If that is the case then we ought to create another vehicle. I think theGovernment is going to have to provide a little more details for us on this new programme but, on the face of it, it doesn’t make a hell of a lot of sense.”

In 2012, the Government had committed roughly $10 million to its Mortgage Relief Plan, which was supposed to benefit around 1,000 out of an estimated 4,000 delinquent homeowners. Mr Christie later admitted in the House of Assembly that the plan would only assist “four or five” people.