Up to 65 percent of the delinquencies the Bahamas Mortgage Corporation (BMC) is now struggling to collect originated between 2002 and 2007, according to its chairman, capping a "terrible, dark period".
Dr. Duane Sands shed further light on the state of BMC during a speech to the Senate yesterday.
In particular, he revealed that records at BMC during this period have "gone missing", with $1.8 million on the books at financial institutions that cannot be found at the mortgage corporation.
"Things were so bad, BMC could not say how much it had in its bank accounts," Dr. Sands said. "What happened to the records? The Bahamian people want to know. We had to write all of the banks in The Bahamas to find out how much they were holding in the name of BMC. Comparing the records with the banks, there was $1.8 million being held that BMC had no record of."
The comments in Senate follow earlier statements made by Sands to Guardian Business concerning the looming "judgment day" of BMC. He said for too long the company has been seen as a "donkey to ride". Major financial problems now being encountered by BMC are being blamed on the administration from 2002 to 2007.
When he arrived in office in 2007, Sands said BMC was already in "serious financial difficulty". As of December 31, 2010, there were 3,019 loans under repayment with a book value of $175 million. The chairman explained that 1,277 mortgages were in default, 1,119 of which were in default for more than 90 days.
Whereas in 2002 there were $1.9 million in delinquencies, this number rose to $14 million in 2007, he said.
"This was the era of the worst, most incompetent and reckless fiscal mismanagement of the mortgage corporation, putting Bahamians in horrible circumstances," Sands claimed.
Meanwhile, the sinking debt fund, a vehicle used to pay down and retire debt, went from $55 million in 2001 to $101 million in 2007. It now stands, he added, at $119 million.
Building public housing through the issuance of bonds, Sands said the 1,400 homes built from 2002 to 2007, while helping some citizens, actually impoverished the housing market.
He announced that many of the houses actually had to be repaired at a greater cost than the original construction.
"It was unethical to continue that aggressive housing project," he said.
The chairman of BMC once again compared the situation to the U.S. sub-prime crisis that threw the entire world economy into a tailspin.
Sands is calling for BMC to have veto power to prevent further projects proposed by the Ministry of Housing in order to offer prudent financial advice.
He reported that between now and 2020, $21 million worth of bonds are set to mature. From 2021 to 2030,  $115 worth of bonds must be paid, not including interest.
BMC currently earns $2 million per month.

Click here to read more at The Nassau Guardian