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Mortgage Market 'In Very Bad Shape'

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamian Contractors Association's (BCA) president yesterday said the "very low" number of qualifiers for the government's low-cost serviced lot initiative was likely "not a true indicator" of the market.

Leonard Sands argued that there would be a greater number of purchasers once the Government expands the programme beyond the uniformed branches, while agreeing with Romauld Ferreira, minister of the environment and housing, that many Bahamians, particularly those who can have salary deductions, have been seduced by predatory lending and cannot qualify for a mortgage.

"People are finding it hard to qualify and that's their financial situation," Mr Sands said. "If you can't qualify for a $15,000 or $30,000 lot then your financial situation is bad. I don't really know what the Government could do in that regard.

"Could you imagine trying to qualify people to pay a mortgage on a $100,000 house? If you can't qualify to secure a loan of $15,000, how would it be possible for your to qualify for a $100,000 mortgage? One of the reasons I believe we see the Mortgage Corporation struggling is because we had people receiving mortgages who couldn't afford it or really qualify in the first place."

He added: "I think what we are seeing is that an attempt to approach the housing programme with a different financial model is being met with the same challenges. We are still finding that the number of persons who can qualify for a home is dwindling. That's the situation contractors were faced with five to ten years ago.

"I think this new data presented by the minister suggests the market is in a very bad shape. We're talking about the uniformed branches. Persons whose salary is secured can't qualify for a $30,000 loan. Contractors looking for work in their residential sector with programmes like this will have a very difficult time finding their consumer base."

Mr Ferreira revealed that the Department of Housing has received about 60 applications for its serviced lot initiative, but only nine have qualified. He said government was not considering dropping prices below $15,000, with the programme currently being offered to the uniformed branches of the civil service, teachers and nurses.

Mr Sands said it would be premature to suggest that most Bahamians will not qualify. "We are encouraged by the fact that the Government has indicated that, in the future, it will open these programmes up to the general public, and I think that in doing that there can be a bigger group of persons who have different financial capabilities being able to qualify," he said.

"I don't think you can cast the net over the entire Bahamian community and say no one can afford a $15,000-$30,000 lot. I think you would find many persons who would be able to take advantage of that opportunity.

"Right now, in the private residential market, persons are paying $75,000-$80,000 for a lot, and one can only imagine how many people could take advantage of something to help the cost. It would be premature to suggest the entire market can't afford it. I think the current market has been the victim of predatory lending practices, which has their finances in a mess."

Comments

bogart 8 months, 3 weeks ago

Yes Mr. Sands, many lenders whose headoffices are in foreign countries set targets for local loan officers to meet. Some lenders loan officers may have to give out say 3M in mortgage loans, credit cards, consumer loans etc...... at certain branch locations......and if these loans totalling 3M million per year is not given out then the loan officers would not get an banking skilled loan officer salary increase.....go figure. Mortgage institutions hire persons who are first skilled in accounting, mathematiczl skills to give mortgage loans......but have these SAME ...mortgage BANKING SKILLED LOAN OFFOCERS ....performing ......the functions of SALES AGENTS and on the basis of selling receives salary increases. IT SHOULD also be a.... "CONFLICT" ...for the SAME MORTGAGE LOAN OFFICER in a cubicle alone with the mortgage applicant.....trying to meet their targets to get a salary increase TO BE THE VERY SAME PERSON.....SELLING.... the customer a mortgage product........AND THE...... very same individual TO ALSO BE....... IMPUTTING COMPUTER INFORMATION.... same appicants financial details into computer loan application form AND SAME....INTERVIEWING MORTGAGE APPLICANT....COACHING THEM ...ELICITING.....SIGGESTING TO THEM...LEADING THEM TO GIVE CERTAIN RESPONSES....OR CONVENIENTLY ASKING ....OR NOT ASKING....APPROPRIATE ...QUESTIONS TO "QUALIFY" THEM FOR THE MORTGAGE....coaching, eliciting leading or not asking them the appropriate questions to sway them to qualify. OF COURSE these should be mortgage applicants who are very grateful amd leave tips - to insure prompt service....... For all of the above false suggestions which may or may not relate to lenders changing their application processes which were perfect,I do sincerely apologise.

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Socrates 8 months, 3 weeks ago

at the end of the day, regardless of the sales pitch, each individual has to accept responsibility for their actions or inactions. this is something we Bahamians, and frankly a lot of people other places too, suffer from.. we dont take responsibility for anything. its always someone else's fault. by this reasoning, drug abuse, corruption, prostitution, gambling, etc., are all the fault of the party pushing it, not the customer. why have a brain?

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bogart 8 months, 3 weeks ago

100% FULLY ARGEE...,!!!! We Bahamiams do not need to go to any bank and borrow, yes ..!!!!

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