February 15, 2017
Minister of State for Finance Michael Halkitis yesterday tabled the amended Homeowners Protection Bill, 2017 in an effort to foster homeowner protection, but admitted that the bill is not a one-stop solution to the Bahamian mortgage crisis.
During his contribution to the debate yesterday in the House of Assembly, the minister said the government does not view the bill as a "panacea to the mortgage crisis".
"In this respect, the government is continuing to pursue its efforts with respect to borrowers' protection, stimulating economic activity and job creation," said Halkitis.
He stated that the bill represents the "legislative centerpiece of a comprehensive response" to the Bahamian mortgage crisis.
He also pinned the 2008 financial crisis as the direct cause for the current Bahamian mortgage crisis.
Halkitis went on to outline several key aspects of the bill, with one of them being the provision for a borrower to select professionals to be used in the mortgage origination process.
Other key aspects of the bill include the provision for the lender to grant the borrower 30 days' notice of "default in payment" prior to the start of legal proceedings.
Another key clause of the bill involves giving the borrower, or a contributing member of his or her immediate family, the right to apply to the court for relief in the case where the borrower is unable to satisfy the obligation.
He added that the bill would also enable those purchasing a home to retain lawyers, appraisers and insurance brokers of their choice, subject to certain conditions.
The bill would also allow for the transfer of mortgages between financial institutions at no cost to the borrower and seeks to prohibit excessive salary deductions, according to Halkitis.
He pointed out that the Securities Commission of The Bahamas (SCB) is in the process of promulgating rules to govern the operations of money lenders in the country.
"The Homeowners Protection Bill, when enacted, would be major step forward in the rights of mortgagors in The Bahamas, bringing them in line with rights that mortgagors receive in countries in this hemisphere," said Halkitis.
But concerns were raised over the bill by Leader of the United Democratic Party Greg Moss, who previously contributed to the drafting of the mortgage relief legislation.
Moss argued that the bill would benefit lenders more than borrowers and suggested that it brings nothing new to relieve the growing debt in the housing market.
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