BMC mortgage crisis could lead to strain on social services

BMC mortgage crisis could lead to strain on social services

The welfare arm of the Department of Social Services may find itself inundated with more new cases, as the financial crisis at the state-run Mortgage Corporation has led to the eviction of many homeowners in recent weeks, and has prompted one noted attorney to advise his affected clients to access state benefits.

Wayne Munroe, Q.C., who represents two families that are now faced with eviction and three families of the Mt. Moriah constituency who were evicted by the Bahamas Mortgage Corporation (BMC), said Thursday that he has instructed his clients to seek social assistance.

Munroe, who ran in the Mt. Moriah constituency for the Democratic National Alliance (DNA) in the 2012 general elections, told Eyewitness News in an interview at his office, that laws should be amended to avoid a social crisis.

“In the case of the Mortgage Corporation, I am going to be advising all of those folks to go to social services, to get social services to rent premises for them to stay since they are homeless,” Munroe said.

“I had advocated every time this mortgage review comes, that we pass a law that a mortgagee cannot take possession unless they have a sale or a lease for the premises if the mortgagor is willing to pay – at minimum – what would be assessed as a reasonable rent because it makes no sense.”

Munroe added that BMC must have some regard for its property and argued that the evictions, more or less, put the BMC in a much more precarious position.

Munroe explained that if the home is left vacant for a certain period of time it will not be insured.

“There is no insurance coverage if it’s damaged by hurricane,” Munroe said.

“There is no insurance coverage because, a classic insurance policy says, if a home is unoccupied for 30 days the policy is noneffectual it lapses.

“So, all of that would cause you to think why are you making this house unoccupied for a period where it will not be covered for peril?

“So, as I said, I don’t understand it other than the point of view of being spiteful and maybe vengeful because, you don’t like how the people talked to you, or you don’t like those people ignored you, but you can’t be having regard for your security.”

Social Services Minister Frankie Campbell declined to comment on this issue.

Deputy Prime Minister and Minister of Finance Peter Turnquest told Parliament on Wednesday that the BMC is more than $395 million in debt.

Last week several homeowners had the locks changed on their homes for failing to make their mortgage payments. Since then, there has been much public discussion on the issue.

Turnquest detailed that the outstanding bonds for BMC are estimated at $62 million and more than $323 million in interest totalling more than $395 million.

Housing and Environment Minister Ramould Ferreira said the BMC aims to reduce the bad loans on its books.