It is up to every man or woman who has a mortgage to take out the copy of the mortgage document and read it again. We would be surprised to see what powers we gave to the mortgagee.
The reality of today’s real estate market is that, for various reasons, land and house values in Barbados have declined and in some cases significantly. If we don’t keep our mortgage payments, the banks are forced to take some action. The banker looks at his bond to see if he can at least get the principal back. Usually, each missed payment brings the loan closer to the possible value of the collateral. When the market is depressed, the problem becomes more acute. The banker’s first duty is to his depositors, whose money he has lent us. The thought of where the mortgagor will sleep or eat has nothing to do with the decision.
For example, if a customer has a mortgage and is having trouble to the point where the mortgage has been reduced to $ 400,000 and no payment is due, after three missed monthly payments, the banker stops taking the accrued interest into profit. . . He reassesses the market value of the title and if the market offers only $ 400,000 for the property, he will sell under his selling powers. We could call Archangel Gabriel for help, it wouldn’t matter. Even if our grandmother lives in the house !! “Tough Tittie”!
It makes a big difference if the mortgagor is willing to negotiate with the banker. Say instead of paying $ 3,000 per month, you can only pay $ 1,500, so the banker will consider extending the term of the loan. Say a windfall of X money will arrive in the hands of the mortgagor within the next six months, the banker has patience and will wait. Say we are on the verge of death and the banker knows he can sell the property for $ 1,000,000, the banker will wait and watch for obituaries.
If the mortgagor can find a buyer closer to their property appraisal, then let them hurry and do it.
Calling on the bank to show mercy, sympathy or tolerance is a no-no. Let’s say the banker is nice and lets go. He would be designated a wimp and would be looking for a job. Fortunately, a committee oversees most loans, and the bank manager may be just the face of the committee.
The real problem is the perilous or precarious state of the economy. John Doe cannot pay his mortgage because he lost his job. Mary Doe’s business had to shut down because people didn’t go to her. We are fighting for our survival on the international scene and contrary to the waves emitted by our Central Bank, the banks are confronted with thorny problems. The Wild Coot has brought such an issue to the public’s attention in recent weeks. Our government is about to hire the banks to do the onerous work of the US Internal Revenue Department. Banks have to take enormous responsibility with the attendant exposure to risk. Look at the huge billions of dollars in fines recently imposed on banks. Can a bank here in Barbados afford such risks? Whoever advises the government does not consider the bank’s exposure.
But Wild Coot, if we don’t accept FATCA, then Uncle Sam will deny our banks the use of correspondent banking services with their US banks. Oh! Well, there are some battles worth fighting for when it comes to justice. We boast of the best legal minds. Next year we will celebrate 50 years of Independence. Soon we will be celebrating 300 years of democracy, long before the United States. Can’t we join our voices in protest instead of bending down like mice? Let us take this matter to the United Nations or the World Trade Organization. The Caribbean has always relied on Barbados to take the lead. Fathers, mothers, grandfathers, grandmothers gained knowledge here and abroad and came back and influenced their offspring to come back here to save our pride and our industry. Will those in Parliament “disguise righteous nature with favored rage: / Fathers who, like so many Alexanders (Adams, Barrows, Arthurs) have in these parts of the morning until even fought; / Be copy now to men of coarser blood ”.
My next article will deal with reciprocity. Do Barbadians in America who earn or have a business with a turnover of $ 50,000 or more have to pay taxes to the Barbados Revenue Authority? Is an American being worth more than a Barbadian being? If you say your currency is a global currency, should you penalize people who use it around the world?
Harry Russell is a banker. E-mail [email protected]