Speedy foreclosures rob owners of equity

| 16/07/2015 | 106 Comments

Cayman News Service(CNS): A group of concerned citizens, many of whom have lost their homes, have come together to raise awareness of what they see as a collusion between realtors, valuers and banks over speedy foreclosures that rob owners of tens of thousands of dollars in equity after just three months of arrears. Members told CNS that as many as 3,000 local properties have been taken by banks in the last three years, but given the shocking speed and ruthless way homes are being auctioned to cover loans with no regard for house values, they say government must now intervene.

As well as the obvious direct loss to homeless families of their house, their equity investment and the consequences of that, the burden will fall increasingly on government to help these people who have now become impoverished because of the over-zealous action of local banks. In addition, the fire sale of many properties is reducing the value of the homes nationwide as foreclosure valuations are absurdly distorted.

Sick woman faces imminent eviction

Following the publication of this news article today, the members of CAEI called CNS to report that a local woman living in Savannah Meadows had received a writ of possession from lawyers Thursday demanding she leave the property immediately despite a stay filed with the courts and hearing set for 24 July. The woman, who is in her sixties and suffering from significant medical problems, is about to be made homeless and has nowhere to go. Campaigners are urging anyone who can assist in helping her remain in her home, at least until the court hearing, is asked to contact the group via their Facebook page (see link below) or call directly on 929-5600.

While people described home loans in Cayman as mortgages, they are in fact demand loans. As a result, the law allows banks to seize homes from families regardless of their circumstances or previous good standing after just three missed payments. The story told by the members of the group about their own circumstances and the others they are trying to help were surprisingly similar.

Most had significant equity and had properties with up-to-date values from the banks that had dictated their costly insurance premiums. But with no negotiation or effort to get the homeowners passed their difficulties, banks are taking properties and listing them for auction literally under the noses of the homeowners within 90 days with price tags that are encouraging a cut throat approach by realtors.

The fledgling group, which is called Caymanians Against Economic Injustice, is lobbying government to address the existing foreclosure legislation and examine the entire regime regarding what they see as a developing scam between the surveyors and valuers, real estate agents and the banks.

While the US government and other western administrations had stepped in with legislation to prevent speedy foreclosure against people caught up in the world economic recession, it appears the rules in Cayman have been adjusted to make it even quicker and easier for banks to take loan holders who miss just three payments immediately to court and list the property for sale.

The newly formed committee has more than a dozen active members and is reaching out to others whose homes are in jeopardy to join the campaign to press government to act. All of them said that their homes were taken after around 100 days, and regardless of the equity or genuine value of the property, the banks significantly undervalued their homes, selling them in many cases for half their worth to recover just loan value only.

The group includes a cross-section of people, including educated, qualified and experienced local professionals, businessmen and former political candidates, all of whom have held prominent positions in the community or served on local boards. The common cause of their difficulties was divorce, sudden serious illness or job loss, leaving them struggling to meet hefty loan and insurance payments for what could have been a temporary financial problem but what became a catastrophe.

Regardless of their previous good standing and history of payments on a home loan, banks are issuing demand letters and moving to foreclose on properties at the 90 day mark, literally forcing families, single mothers, elderly and infirm homeowners onto the street.

Local locksmiths have reported changing locks on foreclosed homes on a daily basis and the court lists are filled with suits from all the high street banks against homeowners. The banks, it seems, are working with real estate agents and listing properties ready for foreclosure auctions after valuers have given ridiculously low values for a reserve price. But the low price tags in most cases match the exact amount of the loan against the home, disregarding the real value of both the house and the land they are on.

In some case people who once had hundreds of thousands of dollars of equity in their property are now destitute, indebted to banks, penniless and homeless.

One prominent community leader, who suffered a bout of serious illness and lost his home as a result, explained that despite being valued by his bank at over $550,000 for the insurance on his loan, his home was auctioned for less than $380,000. He said that was about the value of the land on which the property stood. “The bank sold my land at auction and threw in my house for free,” he said, as he illustrated the ruthless nature of the foreclosures.

He is not alone. The committee related dozens of cases, including their own, where they are trying to help and learn from their own experiences to save homes in the face of the mounting numbers and the lack of action by government.

Although all of them have talked with their various representatives about their own and other cases, they told CNS that the politicians seemed overwhelmed and unsure how to help, as they all appear to have had dozens of representations from constituents regarding families losing their homes.

Taking the first steps towards starting a national discussion about how the issue and other barriers to the economic development of local people can be addressed, the group wants to see sensible legislation to protect homeowners and the value of local property.

Members of CAEI are urging anyone who has lost their home or whose home is currently in jeopardy to contact their group via email

CAEI345@outlook.com

or through the Facebook page 

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Category: Local News

Comments (106)

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  1. Anonymous says:

    And when you get the news that you won,you get a heart attack and die.

  2. Anonymous says:

    Speaking of losers nobody beats you sunshine.

  3. jada says:

    Only in Cayman……..tell yeah what they would have to physically come and take me out if I only had about $20,000.000 more to pay on the loan……it wouldn’t go down like that with me …….I would broke someone up…..

  4. Anonymous says:

    I simply do not believe this story. 3000 houses?!!? I have not seen the auction for 1. Anyone willing to post a link to any house being auctioned for hundreds under market value for verification?

    And the insert about the 60 year old being kicked out; please let me know what bank would give a 60 year old a mortgage? Seems extremely risky to me so please name the bank so if I bank there I can switch. If it is an old loan, where is this 60 year old’s family? Surely the balance outstanding on an old loan should be manageable by family members willing to step up.

  5. Anonymous says:

    I am surprised at CNS reporting such nonsense as sprouted by this group. A quick fact check with a publication such as the Cayman Property Review would show that there have been barely more than 3,000 transfers of property in total over the last 3 years, and an easy enquiry at Lands & Survey would reveal that there have only been 96 Transfers By Chargee (foreclosures) since 2002! To give media time to such conspiracy theorists as this group of losers is beneath the level of journalism that we have come to expect from CNS.

  6. Pure Pressure says:

    Yes Caymanians finally awakening and finding out “they are not here for us” uaaaaaah how truly sad!!! Curb your wants before they overpower your needs? Put the government in Rehab over this really powerful Immigration permits addiction they have! I know the Caymanian people and their infrastructure will appreciate it.Thanks

  7. Anonymous says:

    CaymanKind.

  8. noone says:

    Bankers are crooks and thievings!

  9. Johnny99 says:

    To all the morons without any consideration. It’s easy to say stupid things when it ain’t you on the other end. Be careful cause whether you believe it or not, your turn coming.

    You have no factual knowledge as to why these people are in this situation and you don’t care.

    To put it into perspective for you, this same mentality will be used to decide wether or not it’s worth it (money wise) to keep your mom, dad, kids and even you alive when something happens. I hope you think about that next time you decide to be smart.

    On the other end, people are getting fed up with all the cutthroat, criminal and gouging that these people take out of the merger earnings these people earn.

    But alas, nothing lasts, and sometimes it takes a physical action to get results. I am glad I won’t be the one on the receiving end. What about you. IVAN did it, it will happen again. You think you can handle life like that, mr cushy.

    And it’s funny, you can’t do anything about it when it happens.

  10. Anonymous says:

    Don’t be so sure of that. The banks have sold properties below value and the borrower is still left with the debt! So he should not take the view he can just wait….

  11. Common Sense says:

    Rent your home.. simple solution.

    If you know the bank is going to take it in 3 months rent it in 2. Go squeeze in with a family member or friend and let someone else pay. Any other option the home owner explores is going to cost money they don’t have so rent the property.

    This way you retain ownership, banks get their money, and your equity in the property is protected. If you don’t see a way out of your misfortune then put it up for sale while its rented.

    Get Proactive.. not Reactive.

    • Anonymous says:

      Not everyone has family members who can accommodate family, including children and when some members were ill and unemployed.

      If the mortgage is $1800 and the house can only be rented for $1600, the family still has to pay rent elsewhere, maintain utilities for rental and insurance, upkeep in property rented and find the extra for the bank and when unemployed the better option might be to remain in the house, put the money there and seek refinancing.

      Factual information is important to understanding what is happening here and where there is unemployment the government can and should step in to help speed up a placement. If there are serious health issues and elderly persons family assistance could be provided for a short period

      • Bacco Bull says:

        the cost of living in Cayman is just too high this is a part of the negative
        equasion.

        Duty costs must be reducedA

        lso MLA salaries are way too high they get paid more than a UK MP, and US. senator!
        l
        time to cut to the chase.

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