Categorized | Business

Clearing Banks Back Mortage Relief Plan

State Minister for Finance Michael Halkitis said he was among those that sat down personally with the Clearing Banks Association (CBA) to discuss the government’s mortgage relief programme, and on a popular radio talk show last night, he said the programme was something the banks were “prepared to buy into.”
This is supported by reports that the Clearing Banks Association is preparing to publicly endorse the plan.
Halkitis confirmed reports that the CBA) was working directly in collaboration with the government. The Journal understands that the talks included the Central Bank of The Bahamas.
As the Journal understands it, the CBA was ready to endorse the plan last week, when discussions between with the government and the Central Bank are advanced enough that the financial parameters of the programme had been agreed.
Left outstanding at the time were issues with respect to establishing a process and implementation guidelines for the programme. These issues have clearly now been resolved.
One source put it this way:
“The CBA has been pleased to partner with the government and the Central Bank on this initiative to assist home owners and to augment the already extensive support that has been provided by the banking industry to borrowers suffering hardship.”
“Member banks have committed to implementing this programme as a priority once the process and implementation guidelines are finalized,” the source said.
It is possible that one of the outstanding elements had been the exact nature of the government’s involvement in the process. As it stands, the government will not be required to offer any kind of approval – that rests squarely with the lending institutions in question. The government’s only role was the development of the criteria for eligibility.

For eligibility, the home in question must be:
• owner occupied primary residence properties only, including owner-occupied duplexes, with the exception of vacant lots.
• revenue-generating investment properties.
The other details are that:

• mortgages must have originated prior to January 1, 2009
• the outstanding mortgage principal amount should not exceed $500,000
• eligible participant will have an acceptable credit history prior to June 30, 2008, and
• the loan must be delinquent due to documented financial hardship caused by involuntary unemployment, under-employment or chronic illness.

The programme will be launched on September 10 (see story in main section).

Written by Jones Bahamas

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