Plp Mortgage Plan ‘A Ploy’

THE Progressive Liberal Party’s 10-point plan to assist struggling homeowners is nothing more than a political ploy, Bahamas Mortgage Corporation chairman Dr Duane Sands said.

If the plan were ever implemented, he said, it would destroy entrepreneurship in the Bahamas.

Dr Sands told The Tribune yesterday the country’s mortgage situation is extremely complex, and the scheme put forward by the opposition only addresses one component of the issue.

He said: “Yet again five years later, the Progressive Liberal Party has come out with a plan that panders to a need or a desire of the people, but which is not deliverable and the people cannot afford. I find it tremendously disingenuous that the PLP would come out with such a poorly conceived and inadequately considered plan.

“What they are basically saying is redistribute wealth in the country, not on the basis of compromise, discussion or negotiation, but on government imposition. By so doing, you are going to destroy the entrepreneur business class.”

Over the weekend, PLP leader Perry Christie announced a 10-point plan to assist struggling homeowners, including working with banks to have 100 per cent of unpaid interest and fees for persons close to foreclosure written off.

The PLP said that if elected the next government, it would also work with banks and other lending institutions to extend repayment periods on defaulted loans, institute a 120-day moratorium on foreclosures, encourage a reduction in the interest rate on mortgages, extend the first-time homeowners exemption for stamp duty to those who lost their first homes to foreclosure and are seeking to buy again, and pass any legislation needed to stop Bahamians losing their homes.

“Across the Bahamas, home owners are struggling as never before. Many homes have already been lost to foreclosure and many more Bahamians are sick with worry about their ability to keep their homes.

“The Progressive Liberal Party believes that helping distressed homeowners is the right thing to do and the sensible thing to do. It is an important part of getting the Bahamian economy moving and growing again while at the same time creating an important social safety net,” said a statement issued by the PLP.

Dr Sands said the attitude of the opposition on this issue highlights the difference in philosophy between the two parties.

The PLP, he said, tells the public: ‘Stick with us and we will take care of you’, while the FNM believes in providing a level playing field so people can take care of themselves.

He said: “Once the government starts imposing it’s will on a private contractual relationship between the debtor and creditor, now you start to walk down a slippery slope, particularly if it is issued as an ultimatum or a directive.”

This would send the “engine of the country’s economy” a worrying message – that any contractual relationship can be interfered with by government, Dr Sands said.

He also noted that the PLP’s plan does not differentiate between those who have been victims of difficult circumstances, and those who have been irresponsible with their finances.

Dr Sands said it would be easy to blame everyone’s financial situation on the economic downturn, but the reality is some persons have allowed themselves to get into difficulties through poor financial planning and should not be rewarded for irresponsible behaviour.

Nor should those who have actually sacrificed to honour their obligations be penalised, he said.

“I am not suggesting for the slightest moment that we don’t need to look for creative and unusual solutions to unique problems – I am saying that you do not create a solution in a vacuum or wave a magic wand and problems disappear,” Dr Sands said.

He also noted that such an expensive plan would inevitably lead to higher taxes on everyone.

As the country’s second largest industry, banking provides hundreds of jobs for Bahamians, but in order to make up the losses that will result from the implementation of the PLP plan, banks will have to downsize, he added.

Mr Sands said as shown through with the decrease in BMC’s delinquency rate from 40 to 36 per cent, the corporation has been working with consumers.