On December 29th., in his new year's message, the Prime Minister announced that Government would be buying over 780 mortgages from the social security - that means all the mortgages with a balance under fifty thousand dollars.
Today that meant, that 9 homes - for which mortgage foreclosure proceedings should have started - were spared - because their debt has been forgiven, the books wiped clean.
It's a tremendous relief for these homeowners - but still, the initiative has drawn criticism. Some complain that it's taking too great a bite out of taxpayers' money - in what's little more than an election ploy. Today the Prime Minister explained that it's not even 17 million dollars. He says that while 17 million is the face value of the mortgages is that, the real value is far less - as little as 6.9 million - because many of the mortgages are not being paid:..
Hon. Dean Barrow, Prime Minister
"The total value of the mortgages is $17 million dollars but of course there is an element of non-performance in the portfolio. As a matter of fact something like 60% of those 750 odd arte non-performing. So government purchasing the portfolio from SSB is a purchase that is being done at a discount because the SSB. The portfolio is 60% is impaired, so what government is actually paying to SSB is $6.9 million dollars for the mortgages that nominally value $17 million dollars and government also is not paying this money by way of any extraction from government cash flow. There was an arrangement made by the PUP under which government had pre-paid some of securitization monies that were due from SSB to RBTT to whom SSB sold mortgages. And SSB therefore had this continuing obligation to re-pay those pre-payments made by government to government now and the amount currently owed by SSB` to GOB is around $9 million dollars and by the end of the fiscal year it will be up to around $11 - $12 million dollars."
"The $6.9 million dollars that government now has to pay to SSB in order to buy these mortgages so as to write them off and give the lease to people; that $6.9 million will merely then be deducted from the $9 million soon to be $12 million that SBB in turn owes GOB. So while it is without a doubt a loss to the government and a financial outlay. What happen is that financial outlay is kept out of the monies owed to GOB by SSB."
"Last month I made it absolute clear to all that everybody who fell into this category is to be relieved. No effort was made to go through the list of home owners to try to see who is UDP, who is PUP, What color is your color, what age you are, where you live; it didn't matter, this is across the board relief for all 780 odd families that fall within the category."
The PM added that Government will go to the House next Friday with a write off motion. The bulk of the mortgages fall into the bracket of twenty thousand dollars and under.
