Home repossession up by over 34%

| 25/02/2016 | 32 Comments

Cayman News Service(CNS): Local banks repossessed 22 homes, amounting to $4.2 million, in the third quarter of 2015, which the Economics and Statistics Office said was “significantly higher” than just three foreclosures in the same quarter of 2014, amounting to just $338,000. According to the latest official economics report, at the end of October last year, 148 properties, amounting to US$35.1 million, were in the process of being foreclosed, which was 34.6% higher than the previous year.

The numbers of families impacted by foreclosure has been controversial as many local activists believe the real numbers of families facing the loss of their homes is far higher than government officials are disclosing.

The ESO’s Third Quarter Economic Report 2015 noted that the source of the data it used was the Cayman Islands Monetary Authority (CIMA) and that “foreclosures of residential mortgages exhibited an upward trajectory in value and quantity as of the third quarter of 2015, although a decline was posted compared to the second quarter of 2015”.

With $2.1 billion worth of mortgages held by local banks, the ESO said the 148 properties being repossessed represented just 1.7% of the total value of residential mortgages.

This surge in foreclosures come against the backdrop of steady economic growth, a fall in unemployment, a surge in work permit numbers and a drop in inflation – indicators that normally imply overall economic improvement.

However, there are growing concerns that while the financial fortunes are generally improving, there are significant numbers of local families struggling to make ends meet. For some, meeting mortgage payments, even while in employment, has proved very challenging due to low wages and underemployment.

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Category: Economy, Politics

Comments (32)

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  1. Anonymous says:

    Possession against defaulters needs to be made much easier, cheaper and quicker. The costs are passed on to those that don’t renege on their promises and mean higher interests rates for everyone.

  2. Anonymous says:

    People live way beyond their means……. the bank shouldn’t hand out mortgages to unqualified people. People want to keep up with the Jones… it s ok to not live in a four bedroom house.

  3. Anonymous says:

    Mentality in Cayman towards home/property ownership needs to change big time. There is no shame in renting. I grew up in a rental apartment and my parents never bought any property or built a home because they did not want to spend the largest portion of their lives being in debt, and then spend their retirement struggling to maintain a house that they knew would be “half-empty” once their children are grown. While it may have been uncomfortable at times to be somewhat at the mercy of a landlord, in hindsight, I believe they were on to something………. When I look around here, too many elderly can’t even afford to run the AC in their house, they don’t have anyone helping them to maintain a yard etc. I built a modest house and I had a wake-up call over the years in regards to the finances required to maintain a house, be it pest control, garden maintenance, insurance, repairs, hell, try getting someone to paint the outside of your house after 10 years and you fall over by the prices quoted.

    That said, in order to gear more people towards renting, there needs to be some desperate update to the tenant/landlord laws to avoid either side being able to get away with murder so to speak.

  4. Anonymous says:

    Welcome to reality and what happens if we are trying to live the US way! For some strange reason, way too many people in Cayman believe they are entitled to own property whether they can afford it or not. There is absolutely no concept of saving, and if they can get a mortgage for a 4,000 square foot house, why do with only a sustainable 2,000 square foot house.

  5. Anonymous says:

    While a repossession is sad it is also often the best course of action for everyone.

    The bank gets an opportunity to recoup their losses and the mortgagee an opportunity to get out from under a payment they could not afford and walk away.

  6. Anonymous says:

    Parasites

    • Jah Dread says:

      And you think that those who are losing their homes just do so for gusto eh!. Ya be.ieve the minimum wage of $6.00 will provide a great cushion eh, bBoy we in a mess, Government that can’t see see the trees from the forest.

    • Anonymous says:

      A bit harsh way to describe the defaulters who fail to honor their contracts, but I get your point.

  7. Anonymous says:

    I’m going to paint with a broad brush here, but it seems like the same ilk of housing bubble that wrecked the U.S. economy — offer government-promoted real estate loans to people who can ill afford it, and then act surprised when they are unable to meet their obligations. I know that sounds hard-hearted, but dammit, we as a people have to be able to afford –long term — our obligations and not be enticed into iffy deals that may eventually marginalise our income.

    We also have to be smarter when we enter into a contract; I see some people with decent incomes buying ridiculously expensive cars and living paycheck-to-paycheck, leveraged to the hilt.

    I am a renter. I hate frittering away that money every month. I’m saving very slowly — the only savings I’m capable of. I have to do what is best for my family. We hope to someday be able to afford to buy a house of our own and live to pay it off. Neither of our jobs are with government, thus our employment is not 100% secure. Not everyone fits the above mold. Some do. I wish them well.

  8. Anonymous says:

    …up 34%? Wow.

    Some Banks still threatening to foreclose on persons properties (e.g. homes) for soon to be 3 months payments that will equate to less than CI$2500, an there is still not agreement to restructuring the mortgage. Oh, boy…with unemployment still high, and more layoffs in the pipeline, I can only sympathized with these individuals – at least those who truly tried the keep their mortgage in good standing – even making additional payments to their principle over the years – yet the banks still feel the need to foreclose rather than restructure.

    I don’t even want to touch on the Realtors and Appraisers. That’s another story.

    This in an incredulous time in Cayman History.

    • Anonymous says:

      yawn….

    • Anonymous says:

      You do realise that the Bank has to go to court before it can foreclose and the court will invariably make the Bank show that this was a last resort issue with no other reasonable course of action. As such the court will know the real facts behind any of the stories that you may have heard that sit under your claim

      • Anonymous says:

        Well, let’s see about this, as the Mortgagees (favorable) evidence stacks up.

        • Anonymous says:

          Yes it will stack up. If you don’t pay your debts on a mortgage it is your problem not the banks. The current law is too lenient on those that renege on their agreement to pay. And a lenient possession law in favor of homeowners pushes up interest rates on products and the levels of deposits required. Good honest people who pay their debts then end up subsiding the delinquent.

  9. Anonymous says:

    It would be very interesting to know if the ESO data ,named the financial institutions. Some of these banks are predators. I know some people ignore there obligation to the banks ,but some people have choose which bill to pay each month ,eat ,pay CUC, pay high insurance on these said homes or pay mortgage …

    • Anonymous says:

      Don’t get into borrowing if you can’t repay it. If things go wrong, sell up and rent as quick as you can. Don’t buy flashy cars, you can’t drive them far, they are expensive to run, you can’t live in them or eat them.

  10. Anonymous says:

    Have no fear Ladies and Gentlemen, this is only happening because the economy is improving and on the rise, by this time next year, they will all have their homes back, and no one else will be losing any more homes.

  11. Anonymous says:

    Many of these are civil servants, unfortunately! The largest (but shrinking) Middle Class of Cayman.

  12. Gt voter says:

    Dear PPM

    This is the reality for Caymanians under your stewardship you cannot spin the truth.

  13. Caymanian says:

    This topic by no means is a laughing matter! Real life situations happen to us all and where some may be fortunate with finances to cover their monthly expenses and any unforeseen circumstances that may pop up, count yourself blessed instead of thinking that you are better than the average Joe as you judge someone else situation.

    If you are a civil servant, assistance can be sought through CIDB. However, that does not apply to the unemployed or if you work in the private sector. Who then does those individuals seek financial assistance through? Not everyone may work for government but we all pay taxes in one way or another and we are all having to deal with the high cost of living! It is quite sad when a family is displaced, not for a lack of effort on their part to try to make ends meet but due to either unemployment and one salary not being enough to cover the bills and get the mortgage up-to-date if fallen behind.

    The banks are not compassionate! They are a business and does not always take into consideration an individual’s situation and what their payment history was prior to experiencing financial difficulties. Government needs to again work with the banks to prevent families from losing their homes. Have a heart and imagine if you were the one on the other side of the table seeking assistance!!!

  14. Anonymous says:

    Thank god for minimum wage! zzzzzzzzzzzzzz

  15. Anonymous says:

    This is good evidence that the housing market is improving. The banks can start to enforce against more of those that fail to honor their promise to pay their debts without being hit by too much of a loss so that those that do pay what is due do not have to cover the cost.

  16. Anonymous says:

    Good. Take their satellite dishes and their Benz too. They couldn’t afford them to begin with.

  17. Anonymous says:

    its only the tip of the iceberg……
    maybe ask your local trusted realtor for his latest ‘market update’ (always a good time to buy!)

    • Anonymous says:

      CASE 1: My acquaintance had a ~CI$47K (0.32 acres) [in land] valuation on his raw land, compared to another person’s ~CI$128K (0.27 acres) [on the ocean side].

      Both properties are divided by Seaview Road (Main Road) and less than 100 meters apart. Not to mention, while taking advantage of the higher elevations, a two-storey home built on that same 0.32-acre property would provide for the same panoramic ocean views and cool windward breezes.

      Oh, by the way, while a certain big developer has ~CI$90K and higher (per house lot) sales on his property, that is located further inland – yet, is still able to capture incredible ocean views. To think this developer gets the benefit of an increased value while my buddy’s land suffers a 50% hit/decline.

      This is why one should always seek additional information and make comparisons, before accepting their property appraisers’ report as a “final value”.

      • Anonymous says:

        My friend had a similar situation last month, and she has since changed her mind about selling her property. Why sell, if she will be getting “pittance” compared to neighboring properties that are exceptions to the “low-balling” schemes.

        Really- What’s going on here? Real Estate Boom or Bust? [Smh]

      • Anonymous says:

        So why such a disparity in valuations?

        • Anonymous says:

          One explanation would be that the properties have significantly different value. Oceanside or not. Development value is very different.

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