GT MLA fighting for new mortgage regime

| 26/04/2018 | 99 Comments

(CNS): Kenneth Bryan, the independent member for George Town Central, is taking on the battle to overhaul the current legal regime around home loans, replacing it with a genuine fit-for-purpose mortgage regime. Bryan believes that the current demand loan system operated by all of the banks is inherently flawed. From the very beginning, starting with misleading adverts, the system is tipped completely in favour of the financial institutions, he said, who can seize people’s homes just three months after the first default regardless of the circumstances.

Speaking at a public meeting in George Town on Tuesday evening, Bryan set out in detail the problems with the current regime. He outlined his plans to solve the disturbing situation of Caymanians losing their homes and their investment, ending up homeless with life-changing, crippling debt as a result of the chain of events that is triggered after just three payments are missed on the demand loans.

Bryan has made this a priority for his term in office but as a lone wolf in the Legislative Assembly it is difficult for him to make much progress on his own agenda. Nevertheless, with the help of reluctant government back-bencher, Bernie Bush, Bryan is bringing a private member’s motion to parliament for the next sitting in June, asking government to form a committee to conduct research and analysis into the current regime and all its flaws and to come up with draft proposals to introduce mortgage legislation.

“I want government to come up with a holistic solution that sees the entire regime overhauled and  simplify the process,” he said. “We can’t solve this piecemeal; we need to introduce a balanced and fair regime where the borrower as well as the lender is protected.”

The road to foreclosure starts at the very beginning with what Bryan says are the misleading television ads from lending institutions who claim they are selling mortgages when all they are offering are loans secured against the home. “These are two very different things,” Bryan said, as he accused the banks of deceiving customers and tempting them into loan contracts to buy their dream home that are often inappropriate. These loan contracts are often incomprehensible to regular people who obviously cannot afford a lawyer to check them out. But the bias towards lenders is stark when they can seek to foreclose on a defaulting borrower after they miss just three payments.

The home loans most institutions offer lead to harrowing stories once the default begins to spiral. Borrowers who may have been compliant for years, even with equity in their homes, can still lose their house as there is no legal protections that stops the banks from selling the home for less than its market value. Bryan also believes the longstanding concerns about collusion and conflicts of interest between banks, valuers and realtors are common because of the lack of regulation.

He highlighted numerous problems during the meeting regarding the current foreclosure process that leave borrowers completely vulnerable to the banks, valuers and lawyers. But he said the introduction of a comprehensive mortgage system and relevant regulation of the players, would redress the balance, giving borrowers at least a fighting chance to keep their homes when they fall on difficult times.

Most people lose their homes as a result of losing their job or a family break-up but, in some cases, given more time they could get back on track. But even in the worst-case scenario where the home can’t be saved, Bryan believes a mortgage law could at least protect the equity people have invested in their homes, prevent banks and valuers from selling properties at a fraction of their value and hold the borrowers responsible for any remaining debt as well.

The problem of former borrowers who have defaulted, losing their investment and equity as well as the house itself, is a significant illustration of how unjust the system is. But one of the most insidious elements of the whole scenario is how in some cases the bank’s ability to put repossessed homes on the market at fire sale prices leaves the borrowers with residual debt and banks can seek earnings orders to recover that as well.

Comprehensive legislation around home ownership may also be able to protect borrowers about to lose their homes who have children or vulnerable or elderly people living with them. At the moment, the banks are free to make families, even those with very young or disabled children, homeless when they take steps to foreclose.

While government has been reluctant to accept that there is a significant problem with the repossession of homes, the harrowing stories of people being thrown on to the street with nowhere to go are persistent.

During the previous administration the government indicated it was a small percentage and the former finance minister was inclined to dismiss repossession as poor cash flow management on the part of the home loan holder. Despite this position, however, stories of families being ousted from their homes, living on the beach or in their cars and turning to the overloaded Needs Assessment Unit for help continue despite the recent economic upturn.

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  1. Anonymous says:

    What is missing here is a law like a “Truth and Lending Act” . Yes what we have here is not a proper mortgage regime.

  2. Anonymous says:

    Not read all comments. Anybody mention the Life Insurance that HAD to take out for mortgage to make sure paid back? Will not get that CI10000 back on top of mortgage although mortgage will be settled this year. So if that life insurance HAD to be taken out.. I would like to claim back my money since 2005! If people can be put out of their houses for not been able to pay then I also want my money paid since…. Oh yes soon as status after 15years not through marriage… was thrown out of my job! The three interviews. Really…. Dont get angry… Smile n get even smartly. Educatedd doesnt mean smart. Especially the law firms.

    • Anonymous says:

      Do you expect you car insurance back when you don’t claim too? Access to CNS obviously doesn’t mean smart either!

  3. Anonymous says:

    What happened the last time a mortgage for poor Caymanians was tried. O ya right. All the banks took the hit. It failed big time. But now its time to try again. Cayman kind.

  4. anonymous says:

    It’s not just the banks. I see CICSA Credit Union is taking two people to Grand Court next week to repossess their property.

    • Anonymous says:

      5:48 pm, what do you expect from CICSA, if people borrow money they must pay the loan, if not what would happen to the CICSA /the Banks and the people that have their money there. Caymanians start living within their means and make their loans the first thing on their list at the end of each month.

  5. Naya Boy says:

    Erryting criss as long as Caymanians are the one losing their houses only when certain others do so will it become a crisis???

  6. Anonymous says:

    I was amazed to hear that in 2018, one of the more aggressive foreclosing banks on island is offering 5% down, 30y mortgages at Prime+0.50% with no credit or life insurance security. It’s almost as though their corporate mortgage policy is geared specifically towards high default and foreclosure suckers. Those that recall the USA market pre-2009 liar loans already know how the story ends.

    • Anonymous says:

      So they give their best and its their responsibility for their customer to honor the contract? Is that your game? Why can’t Caymanians understand that its a contract that needs to be paid back in a timely manner? Its not a gift.

      • Anonymous says:

        This isn’t about personal irresponsibility. its about statistics and society’s expectations. Statistically the more sub-prime your mortgages the more likely a default. Socially we (CI, USA, UK, etc.) would rather see fewer people default and accept the cost is that more will not be able to get mortgages.

        • Anonymous says:

          It most certainly is about personal responsibility. And since when is 5% down, 30 year mortgages at Prime+0.50% with no credit or life insurance security considered “subprime”? Subprime mortgages are higher risk as you seem to acknowledge yes but that means the rate of interest they attract is also a lot higher (and they would want insurance) than a borrower with a great credit history would pay. Prime plus .5 is not a premium that reflects significant additional risk.

          The problem here is that there is not a lot of transparency and borrowers who are being foreclosed on are hardly likely to be upfront with the real facts. Their story will be tilted to what makes them feel better. That is human nature. The lenders on the other hand don’t want to have to foreclose unless they absolutely have to and they are even less inclined to publicise their customers personal circumstances to clarify the position and “defend” themselves against the silly speculation.

          Yes there are tragic situations because life sucks sometimes and we have to pick ourselves up and move on. And yes it is possible that someone at the bank is being a d@#k but that is going to be the exception rather than the rule. Statistically a very high proportion of foreclosures are perfectly legitimate no matter how sorry one may feel for the homeowner involved.

          As for expectations, there is no doubt that the banks could be encouraged to drastically tighten up their lending to all but eliminate any risk of default but that would eliminate many potentional borrowers who are otherwise good risk and we would become a nation of renters and not homeowners.

          That would be the subject of another private members motion to demand a reversal of that tight policy because people deserve a fair shot at becoming homeowners……

  7. Anonymous says:

    don’t worry…. the local RICS chapter will respond in a professional/comprehensive way……

    or maybe not…..

    • Anonymous says:

      Useless / pointless bunch.

    • Anonymous says:

      The Chair of the local Chapter of the RICS gave an interview to the press on this matter last week. Unfortunately Cayman 27 only showed a brief excerpt on what was a long discussion on valuations for mortgage purposes.

  8. Anonymous says:

    I have questions if any banker can answer? The bank offers staff rates at 1/2 the interest rate to there customers. Have they ever foreclosed on staff for a loan on a house or a car? Its just a question. If you were selling anything and your sales were going down. Would you drop your price to stay in business?
    So could lowering the interest rate to what is offered in countries say like USA or increasing the term, could that help both bank and customers?
    I know people with money are not paying the same interest rate as John Q Public. They get preferred rates. Why not help a loyal customer who has been banking for 20 years or more. What about families that have used that particular bank for decades? Where is the classified ads for foreclosed properties listed like cars,trucks,boats or houses? Is that a particular person or group that picks up properties at a ridiculous price? Is that why properties are being foreclosed? Just a few questions, please give evidence if you can. Because a lot of people are talking on the street about these questions.

    • Anonymous says:

      The banks don’t offer staff rates at 1/2 off, whatever discount they do for staff is part of their salary. Yes on foreclosed loans to staff, although this is serious misconduct and per the terms of employment you can be fired. Lowering rates on delinquent loans would be an incentive to everyone to default and the bank wouldn’t be in business for too long. Most banks offer longer terms, but access to the same rates as the US isn’t likely, Cayman is a very small market, it’s got a much higher risk profile. CIREBA sells the foreclosed houses and are open to anyone to buy, not sure on cars and trucks, not many of those, but probably on the bank’s website. Anyone is able to sell their property before its foreclosed/repo’d. If they think they can get more for it, they probably should do so, I suspect they can’t, else they would have done so.

    • Anonymous says:

      If the person is a staff member, they’re employed, so why would they be in financial distress?

  9. Anonymous says:

    Make it harder for a lender to seize collateral and you increase the risk profile; the result is obviously going to be higher rates or higher deposits that everyone will suffer. Financially illiterate populism…

    • Anonymous says:

      Actually, there is a cold-hearted argument that having to raise the deposits, etc., and thereby not getting into ‘sub-prime’ loans, would actually result in fewer foreclosures statistically. (Though there is the usual lack of facts to make arguments either way in Cayman.) However, it would then mean having to admit that a segment of our population will be be born, live and die in rented accommodation, i.e., never own their own home.

      • Anonymous says:

        if government really wanted to fix the problem. They should look at why when modern container homes came to island. They tried to shut them down (still might have, i haven’t heard anything of it any longer). But they shut it down and their excuse was fear for the cement factories having hardships.

        So building container homes are hurricane safe, sturdy and cost 1/3rd what a normal dwelling costs. And they are modular. Meaning, you can build it in many ways, shapes and configurations.

        But government shut it down. Why is that?

        • Anonymous says:

          Money wasn’t going into the right pockets anymore.. why else do you think reasonable things fail in Cayman.

      • Anonymous says:

        Cold-hearted or sensible? Most of these entitled moaners should be priced out of the property market if banks were more prudent.

      • Anonymous says:

        Not ever owning your own home is quite normal for many people all over the world.

        • Anonymous says:

          yes it is. But it is a mental shift from the white picket fence ‘American Dream’. If Cayman is replacing this social goal (home ownership) with another, e.g., stable affordable lifelong housing, then it requires a social shift.

  10. Patricia Bryan says:

    These insights into banking/financial institutions and mortgage practices are age old practices. Worldwide. Cayman is merely catching up over the past 10 or so years. This is how banks and financial institutions make and ‘steal’ their money.
    Mr. Bryan should undertake the daunting task of a hand out survey including a questionnaire and space for personal feedback from residents. Islands-wide. There are many with stories of smacking into ironshores after managing to get a home.
    The government for many years now (at least 10-13 years) went from making it difficult for Caymanians and residents to add onto pre-existing structures as we used to be able to do or to erect a structure on another area of a parcel of land that was already developed (i.e. family property), to making it challenging to become homeowners (by not protecting consumers when it comes to the financial industry and banking). Planning Department is also coupled with these challenges.One would be surprised to see who the shareholders and CEOs and board members are of many of these financial institutions (and at the end of the year where the bonuses and salaries really get paid). While people/families, are losing housing at alarming rates never before seen in the history of the islands, and cost of rentals are also at excessively high costs (rental laws needs updating also but this too is being ignored).

    • Anonymous says:

      Good summation that this is more than just a ‘mortgages’ problem. It is multifaceted. But I hope that MLA Bryan / CIG don’t let that distract them and make the ‘easy’ improvements to mortgage rules anyway; like that once the surety is sold whatever is left owing is written of debt. Otherwise it makes a mockery of the situation.

      • Anonymous says:

        So if you let your house run down, not paint it, fix the roof, calk the windows, leave junk cars out front, the bank should pay the cost of that when it’s sold for less than they lent?

        • Anonymous says:

          Except that’s not what’s happening is it?
          But, even supposing that it is, then, yes. That’s the risk the bank takes. Or do you suggest that they should have no risk int eh mortgage deal?

      • Anonymous says:

        no recourse loans are available. they cost more, obviously.

  11. Anonymous says:

    Kenneth is taking a leaf out of Ellio’s book.
    Ellio Solomon gave many Caymanians the opportunity to use their pension fund to invest in land.
    This was fantastic for us, but bad for the money people.
    I own a beautiful piece of land that is appreciating nicely and I own the title.
    Thank you Ellio.

    Many pension funds are actually insolvent and are nothing but glorified Ponzi schemes.

    I am sure that is not the case in Cayman.

    • Anonymous says:

      Ellio set you and tour little friends up for retirement welfare, which the rest of us who have properly planned for will have to pay for.

    • Anonymous says:

      Good luck biting a chunk out that land when you retired and need money to go fosters.

  12. #notmyrepresentative says:

    Kenneth Bryan? Ain’t nobody got time for that.

  13. Anonymous says:

    Thus the entitlement mentality will now address the evil Cayman banks for daring to foreclose on a Caymanian for not paying their loan ( mortgage ) while also securing votes as a man of the downtrodden.

    • Anonymous says:

      Caymanians needs to buy/build houses according to their wages and pay back their Bank loans on time each month and NOT live in the bars/clubs and jet off to Miami each month and not pay the Banks their loans. Remember the banks money belongs to the people that put their money in the Banks, if the Banks can’t fore close and sell the houses, them they will never pay, and the Banks would go broke and close down and the people would lose their money in the Banks. Also if the Banks can’t make a good profit so they can pay the people interest on their money in the Banks, then they would take out their money and send it overseas and the Banks would have to close down. Remember its always two sides to a story. So be careful.

  14. See it like it is says:

    Mr Bryan is completely distorting the facts. The case where a borrower was foreclosed with 3 months of arrears was explained in detail by the Bank concerned and blows Mr Bryan’s claims out of the water. Just look at Government’s lending institution which has a substantial number of clients in default. The problem lies with too many people here taking a very casual attitude to debt repayment, banks do NOT deal in social welfare.

    • Anonymous says:

      Banks don’t want to deal in repossessions either they keep saying. So there would seem to be a middle ground that could be achieved whereby rules/practices are changed that result in fewer bad mortgages making everyone happy. This might mean that we accept that some people will live their entire lives without owning a home. others will never own more than an apartment, i.e., tiny home. Society needs to adapt somehow to reduce the impact of mortgages going bad. What would your solution be? (If you say don’t borrow what you can’t afford to repay that’s just saying the banks need to be more restrained in not accepting sub-prime loans.)

      • Anonymous says:

        That’s fine so long as politicians accept that stricter lending criteria means that many Caymanians will never be offered a mortgage or will only get one on worse terms. Basic economics meets the law of unintended consequences…

  15. Anonymous says:

    Ken, I think you are on to a good thing here but a couple of points.

    No problem with the bank setting its own risk policies on when they would foreclose (3 missed payments or otherwise).

    But the interest rate setting is a huge racket run by the organized criminal organizations they call “banks”. This needs to be regulated now! And forget the tired argument that a bank has a right to earn a profit. If they don’t want to comply with the regulated rate fine don’t sell mortgages. I will guarantee you someone will. So CIG go for it please.

    The other thing is the undervalued fire sale after foreclosure. The criminal element at work at it again. Why is this not keeping everyone in government up at night. Your own people are being victimized by these criminals and once again you look the other way. Why is that?

  16. Anonymous says:

    Mr. Bryan, please explain your interpretation of a mortgage. In some detail.
    As far as I am aware NONE of the Bank’s wish to foreclose on any mortgages as they are not in the real estate business. However, sometimes this happens but only after quite some time and lots of discussions with the home owner.
    Mr. Bryan I am afraid that you may find your understanding somewhat limited.
    If I borrowed money from you to purchase a house, would you not insist on a way to recover you money (take the house) if I failed to completely repay you and did not live up to the chances you give me to do so????

    • Anonymous says:

      While I agree the article needs a definition of what Mr. Bryan’s interpretation of a ‘proper’ mortgage is perhaps you can also agree that after the bank has repossessed the house and sold it that should be the end of things? No garnishing of wages thereafter, etc. If the house ends up below mortgage value that’s the banks risk. And may speak to Mr. Bryan’s point that the wider ‘system’ needs to be examined, including the valuations processes. (I recently received a valuation which gave a value, and a 3-month-sale value because that’s what the banks apparently expect these days. Which suggests that the banks know the valuation isn’t up to snuff. Because if you haven’t gotten an offer in 3 months you’re doing something wrong.)

      • Anonymous says:

        That only works when there is a liquid real estate market, where you can accurately assess what the value is. The lipstick version of valuations here doesn’t paint a picture of what a firesale value is, if the banks were to use the number they can achieve in a foreclosure, then you would need a 50% deposit. So yes, banks could switch to a mortgage and absolve any short-fall, but everyone would have to put more money down, which doesn’t help anyone,

        • Anonymous says:

          I disagree. Fewer foreclosures help everyone. It would help the people not getting foreclosed on. it would help the banks who all say they don’t want to be in the foreclosure-resale business. Win-win.

      • Anonymous says:

        Why should the bank pay for the loss in value of your house? What if the reduced value is a result of neglect of the property. Also, I’m sure a house being foreclosed could be stripped of any value before the event, knowing the bank would make up the shortfall.

      • Anonymous says:

        The Bank’s concern is to recover what they are owed. That should be possible due to the payments already made and providing the house has been maintained. If not then they may recover less than is owed. Therefore like any lender, they are entitled to the rest of the money owed. Would YOU not want the same if YOU were the lender?

  17. Anonymous says:

    Our honorable Premier and his Unity team will sort this out. Mr Bryan just trying to start trouble.

  18. Anonymous says:

    Please explain to me the difference between a mortgage and a loan. I am one of those illiterate borrowers that think a mortgage is a type/category of loan that is secured by real estate. How am I misguided?

    • Anonymous says:

      A ‘mortgage loan’ represents money a bank lent to a borrower to buy or build their home. The ‘mortgage agreement’ is simply the agreement between the bank and the borrower in relation to that loan.

    • Anonymous says:

      i ASSUME (so may be completely wrong) that the suggestion is that if you default on a ‘real mortgage’ once the house is taken by the bank and sold at fair market value (another point of contention) (a) if there is still money owing that is the bank’s loss and (b) if there is money left over after the remaining loan is repaid, i.e., ‘equity’, that money goes to the now former homeowner. Compared to the reported current ‘not mortgage’ practice of, after the sale, (a) if there is money owing you still have to keep paying despite no longer having a house, and (b) if there isn’t much left owing on the loan the bank sells for below fair market value in order to make a fast sale leaving depriving the now former homeowner of the value of the ‘equity’ in their home.

      • Anonymous says:

        Correct, with the same opportunity for the homeowner to sell their home and repay the loan, and keep the equity. What they will find is that they can’t sell for anything more than the bank can, it’s still the same person wanting to buy the property, there aren’t 10 people all looking for a rundown house at the same time. I think most of the equity will be eaten up by court fees, default interest charges, non-payment and realtor fees.

  19. West Bay Premier says:

    I think this is one time Bryan might have a point against loan sharks . In all the many pages that the borrower has to sign at closing for the borrowing of the money to purchase a house /loan there’s not much protection for the borrower against the many reasons in which one can default on his / her loan .

    I think that Banks and loan sharks shouldn’t be allowed to do as wishes . As we know that a house can be valued for one hundred thousand dollars , but when all those documents are signed , you the borrower is obligated to pay the Mortage Company in interest up to three hundred thousand dollars over 30 years . Do we see the kind of interest to which the mortgage company is really making on that one hundred thousand dollars investment .
    I would believe that the issue of mortgage and foreclosures should be looked at more carefully . And that one shouldn’t be allowed to be suckered in to hang his hat higher than he can reach .

  20. See it like it is says:

    The case where a customer “missed three mortgage payments” and was foreclosed was blown out of the water when the Bank involved revealed the full facts of the case. The basic problem is lack of education and common sense, too many local borrowers have neither.

  21. Anonymous says:

    IF you lose your job, and you can’t pay your bills, unfortunately the bank can’t just let you live rent free. BUT, they also shouldn’t be allowed to get an evaluation for $500,000 and sell the house for $250,000 and you owe the bank $400,000. If you couldn’t pay your mortgage from the start, how are you going to pay the difference???

  22. Anonymous says:

    please show me one proven case of collusion between banks, valuers and realtors…..just one.

    • Henry Morgan says:

      Im a little confused here. If there collusion that is fraud so a police FCU issue? Not an issue for government or a select committee.

  23. Anonymous says:

    caymanian entitlement culture continues….

    • Anonymous says:

      This is a problem in many western countries regardless of culture. It is part of the wider problems of housing and the loss of the middle class.

  24. Anonymous says:

    more populist waffle from bryan…. who knows little of the actual issues at hand.
    banks will do everything to avoid foreclosure…it is their last resort.
    please read about the last court case regarding a bank foreclosure…the court ruled entirely in favour of the bank.

  25. Anonymous says:

    I agree that Cayman should take the opportunity to put a better legal framework for foreclosure proceedings in place – for example, having the foreclosure process supervised by the court (as happens in many, many jurisdictions) is a very good way to safeguard against many of these issues and generally affords good protection to the homeowner against potential heavy handed actions by the bank, including undervaluations. However, it is important not to lose sight of the fundamentals here. Banks don’t go after defaulting borrowers for sport – most banks would much rather protect their investment and work with a borrower in default to get things back on track than foreclose. That said, a bank is a private business attempting to make a profit and any losses on its part will be borne by its customers and/or shareholders (ie the rest of us). The bank is expecting, and is entitled, to be repaid one way or another and the circumstances of the default are quite irrelevant. Offering home loans is not a social program.

    If buyers can’t afford a lawyer to advise them on the largest purchase they will probably ever make, and can’t set aside enough savings to cover them for a few months should something unexpected happen, then they aren’t ready to buy and maintain a home, period. Home ownership is not a right, may not be realistic for everyone and is something that far too many people wade into without properly considering all of the implications and what might happen if their financial situation changes. Maybe Government should mandate financial counselling before purchase for some buyers rather than being asked to step in when things go wrong.

  26. Anonymous says:

    Is this guy for real? I have never heard such rubbish and complete lack of understanding of the mortgage process.

  27. Anonymous says:

    Mr. Bryan, please try and find one customer who has missed just three payments and lost his/her home. You will not be able to find any.

  28. Anonymous says:

    All noise. This guy is trying to justify his worth. Firstly, people need to realise that until you’ve paid off your mortgage, the bank still owns your house. If you don’t pay them back, what do you expect? Most banks are willing to work with people. We only ever hear the sob stories however the truth is often that they’ve defaulted countless times and it’s the last resort for the bank.

  29. Anonymous says:

    Bryant defending the dumb and misguided that buy a home and then have 5 kids and can’t afford the home. These people live outside there means and its that simple.

  30. Anonymous says:

    hellooo vegas!??

  31. Anonymous says:

    You could start with some basic financial education. Too many people on this island don’t understand simple maths concepts like interest.

  32. Anonymous says:

    There should at least be a requirement that the house be offered for sale for a period of time at a price at least equal to the debt. You could also require public auctions. The possibility of collusion between bank officers, appraisers, and investor friends is pretty high right now.

    • Anonymous says:

      They used to do auctions. The claim was that there was collusion. So they switched to CIREBA. Hasn’t helped the appearance of propriety.

  33. Anonymous says:

    “miss three payments”….”sell for less than homes value”

    if we can’t make our mortgage payments three months in a row how likely do you think it is that the house has been properly maintained?

    The house declines in value because a poorly maintained home is worth less, selling quickly is the only way for the bank and the suffering homeowner to get any equity out of home.

    it sucks to be in that position, but getting out of that spot is best for everyone.

    • Anonymous says:

      I recently got a valuation done on a piece of raw land, so no maintenance issues. It had two values. The value, and the expected 3-month-sale price, i.e., what you’d need to reduce the sale price to from the value, if you wanted to sell the property within three months, i.e., what the real value of the property is. That second, lower, value was in the report because apparently the banks now ask for / expect it. It may be that the problem is more complicated than you suggest in that fair market value may bow be lower for many properties than the assessed value of those properties, leading to some of the contention of underselling, etc. (Because people claim they are not getting the equity back, as you suggest they should.)

      • Anonymous says:

        Any valuation is a best guess, until something is put out to tender you never really know what its worth. It also needs a willing seller, and a willing buyer to determine value. If there are no willing buyers at the price you might be able to find one at a lower price, but no guarantees.

  34. Anonymous says:

    A joke that will just make it harder to get a loan …. If a home is worth more than is owed someone will buy it thats the way any market in the world works ….just not in the third world …perhaps

  35. Anonymous says:

    As a Caymanian in banking, I’ve worked in banking institutions in 3 countries. They ALL start to foreclose after 3 months. While I agree the system could be easier and more forgiving I think Kenneth has forgotten that the money lent from the banks is also a loan from it’s depositors and it’s own coffers. If a bank made bad loans and ended up defaulting to the point the bank was to close. The depositors would demand they be paid and seek action against the bank because their deposits, in part, were used as capital to fund the bank’s daily lending. Same situation just different names.

    Banks make sure to lend only to those who can repay. It does the bank no good if a loan defaults. Everyone loses. Responsible lending is a preached and practiced requirement, anyone who thinks they were swindled can go to C.I.M.A. (Monetary Authority) and complain. If you want a mortgage, not only is it the banks duty to make sure you can afford it, it is your duty to do the same. People also need to remember they sign a promissory note saying they promise to pay and all the details of the loan are there in black and white.

    I know life happens but the bank is 99% of the time willing to work with you if you let them know right away if something adverse happens instead of avoiding phone calls. Yes it maybe embarrassing but so is being evicted and in the end your issue can be resolved rather then being out on the streets.

    Owning a home is great, keeping it is sometime difficult, people need to realize what they are getting into before they fill out the mortgage application. Some countries require you take a mandatory online course about mortgages and require you bring in a certificate of proof that you have taken it and passed the question test.

    That beautiful house in the clouds can easily turn into the concrete block that drags you to the bottom of the ocean called debt.

    When you default and your home is foreclosed, the bank is out the $200,000 or so you lent them in good faith. They have to recover that money. The only way to do so is to sell the house and hope to recover the amount of the loan owed. This isn’t always the case. He makes it sounds that banks willingly sell at a much cheaper price, why would anyone spend $10 to make something then sell it for $5? That is part of the reason banks fail.

    Banks are there to make money, as any business.

    When a bank sells a foreclosed home for say $150,000, the loan was say $175,000. The bank might have to eat the difference of $25,000 if the borrower cannot pay. This affects the interest rates they can offer, stock prices if listed on the exchange. Banks know they have to sell as close to the $175,000 as they can but depending on the market they may get $125,000 or $100,000.

    That difference is either still sought by the borrower who defaulted, it’s depositors may get hit with rate hikes every now and then to compensate. Associates may either not get higher raises or lower bonuses, investors may not get better returns and while these may seen infantile compared to a family on the street it serves the purpose to show a foreclosure hurts everyone involved to some degree.

    Protecting equity is great, that is a credit on your home that you have earned and paid for but it is also the proof you are repaying a debt that you are responsible for. If I lost my job and my home was foreclosed, I can’t say to the bank I know you lent me the money to by my house but I can’t pay it back and I don’t want to lose the $20,000 equity in my home so too bad for you. If you lent anyone money and they didn’t pay you back would you a. lend them money again? Or, b. try to get your money back?

    You enter a legally binding contract when you get a mortgage, and like any other contract you are obligated to fulfill your part of the contract. We already have C.I.M.A. that regulates our lending practices to ensure a balance of fairness for all involved.

    Perhaps if the price of land/homes wasn’t so damned expensive in Cayman because of primarily foreign ownership fixing up and reselling as investment properties which drive up land value to ridiculously high levels, then perhaps mortgages wouldn’t have to be so difficult to maintain or maybe we should all be paid more or maybe there should be fixed rate mortgages instead of, or in addition to, floating rate mortgages like most banks have now.

    There are wider issues involved than Mr. Bad Banker Bill stealing your house.

    • Anonymous says:

      The disconnect between what you describe and what is claimed is that the banks are (reputedly) not eating the $25,000 difference between sale price and loan remaining. They are still expecting to get it from the borrower. So the bank has no incentive to not make an under-value sale if they expect to make up the difference from the defaulted borrower. They are, potentially, banking on making an under-value sale to reduce the loan to a point that the defaulter can pay again though the person no loner has their house. If it were as you described (sale done, mortgage done, bank eats the loss) there would be less to complain about from the lender/public perspective, and the banks would have less incentive to make risky loans. As it is now they are in sub-prime territory.

      And no fair trying to shift the blame to foreign investment properties. We’re not talking Seven Mile Beach condos here, we’re talking residential sub-developments. The price of that land is high because, as Lex Luthor’s daddy said, they aint makin any more of it.

      • Anonymous says:

        @ 9:58 – Only in certain cases will the bank absorb the difference. I did say “The bank might have to eat the difference of $25,000 if the borrower cannot pay.” Sorry I should have been more clear on that part. And as for the shifting on blame. I’m not talking about SMB condo’s either.

        Do you know how many times I have seen loans passed for people coming here on work permits, stay their time and then resell the property for a much higher price? Do you know how many times I have seen foreign investors buy property here through Caymanian connections and then mortgages for much higher prices come across my desk for the same property? And don’t get me started on the Governments PR purchase program where you get papers through the land ownership. It happens a lot more than you think.

        Yes I know land space is finite on this island and that does affect market values, but the growth of market value is exorbitantly high. It’s almost a 1 – 2 – 8 syndrome. Land is valued at 1, it’s bought for 2 and resold for 8. Granted you can’t blame the home owner for wanting to make money on their property. Free capitalistic societies encourage this but a more realistic trend would be 1 – 2 – 4 (give or take a few points) and the only money seen in Cayman would be to the original seller and then stamp duty. Interest goes to the bank which may or may not stay local and the value of the property goes off island.

        The result is you pay almost $150k – $175k for a one bedroom house that is nearly 10 – 15 years old. To break it down for people, it is as follows.

        $150,000 – Home
        $15,000 – Stamp duty and fees (roughly 10%)
        $165,000 – loan amount
        -$16,500 – 10% down payment (if lucky)
        $148,000 – Actual loan amount

        Rate off Prime + 1% (4.75% + 1%) = 5.75%

        Term 25 years (if Caymanian and 35 or younger)

        $1,611 Repayment

        That’s not including insurance or the fact that most banks use a floating prime connected to the US Prime interest rate (which none of us can control) which mean every quarter your payments may go up or down by $21 per 0.25% based on the numbers above.

        How many Caymanians, especially first time buyers can afford a $150,000 home and you wonder why there are so many foreclosures? $1,611 is an almost impossible number for most first time buyers and virtually impossible for most single Caymanians unless they have REALLY good jobs. This is why if a couple, even if the numbers prove together they can do it, buys a home and split up or heaven forbid one of them loses a job and cannot find one in 3 months (which is usually unlikely) they are out of a home.

        This is why it is said to have 2 – 3 months worth of bills saved up, just in case. The government wants to introduce new mortgage legislature? That’s great, more power to you Kenneth but in truth they need to do something about the price of homes.

        The same home worth $100,000 has a mortgage payment of $1,263 (using the same model above). $350 difference may not sound like much but what could you do with an extra $350 a month? Or to put it in perspective, $4,200 a year or better yet, $105,000 over the life of a 25 year loan. A good chunk of change for retirement or hell the price of a second home bought out right in cash (minus stamp duty and fees of course.)

        As I said, it’s not Mr. Bad Bankerman coming for your house. It comes down to numbers and circumstances. No one can control unforeseen circumstances but we can do something about numbers, as in the price of homes. We’re (banks) players in the game too and yes we may have more control over the game than you, but C.I.M.A. sets the ground rules and is the umpire. Even we have to play by their rules or we get kicked out the game.

      • Anonymous says:

        The banks try to sell the house for the fair market value to begin with then as with all other realtors and sellers, will gradually drop the price until sold or until they are given a reasonable offer. They aim to sell for at least the pay off amount if not a little more. It’s not free for the bank to repossess a house. There are lawyer fees, Registrar fees among other fees that they have to recoup. If a bank goes back after someone for the difference, yes in theory it’s a smaller payment that they should be able to afford but in truth can they? Considering they now have to rent a place for the same if not higher monthly price. How likely will it be they will be able to do so without outside help and if they could get outside help the house wouldn’t have been foreclosed on to begin with.

  36. Anonymous says:

    It is too hard to foreclose not too easy. The problems caused by those that default push up the costs for the good honest people who honour their promises to pay their debts.

    • Anonymous says:

      So you are saying that people who default for what ever reason are not good and honest? Not sure what honesty has to do with a financial hardship.

      It is way too easy to foreclose. Before, you would have to miss 6 months worth of payments before foreclosure. It takes about 6 months to find employment in most cases. This was only changed because the CIREBA cartel was complaining about property sales dropping, and when they allowed expats to buy property that was the cherry on top and the CIREBA cartel took it as an opportunity to kick start property sales. It was a win for the few involved. Valuation companies got lots business, lawyer got all the business for closing, CIREBA member got sales and the Banks got delinquent loans off their book quickly. Lets not forget CIG looked good for kick starting the economy.

    • Anonymous says:

      You took the words right out of my mouth. These reforms will help the minority by increasing costs for the majority.

      People are overextending themselves and that is the real issue. There are so many new vehicles on the road owned by people who can’t afford them.

      Also why doesn’t Kenneth propose a meaningful solution rather then suggest another useless committee. Show me you have value as a politician by providing solutions and not by seeing problems and asking others to solve them for you.

      Anybody can say things:
      -We have a garbage dump problem
      -We have a crime problem
      -We have an education problem
      That doesn’t make you a good politician.

  37. Anonymous says:

    Please tell me the difference between a mortgage and a loan secured with your house

    • Anonymous says:

      Mortgage is the loan to get your home, usually with collateral on something else or on the home itself. A secured loan with your house is a loan for something else (not to buy the home directly) using your house as collateral.

    • Anonymous says:

      A Mortgage has protections for the borrower so that they don’t lose everything in the event of default (which is more difficult to happen in the first place due to borrower protecrions). Secured loan against the house benefits the banks because they can recover the money at the expense of the borrower.

      Because the houses they foreclose on includes all equity, it doesn’t take into account the amount already paid. This gives lenders ridiculous amounts of power to steal homes from people who might just be going through temporary problems even if most of the loan was paid.

  38. Anonymous says:

    good luck with that! ppm members are mostly lodge members and so are the…..i getting grey hairs just thinking of the wall you up against!!?? but i admire both of you for trying………

    • Anonymous says:

      Another Lodge conspiracy theorist. You people are tiring.

    • Anonymous says:

      Exactly 10:35 am

      This is way bigger than most can comprehend. The people that designed the system we were born into, who created paper currency and regulated it; those are the benefactors of it all.

      They own the federal reserves and they tax the banks which have no choice but to tax the people to pay back for their money borrowed.

      You can’t stop this elephant, it’s just too big!

      Kenneth, you are in over your head buddy. But hey, good luck.

    • Anonymous says:

      Really? Is that all you can come up with?

  39. Anonymous says:

    Here’s the thing kids, live within your means and don’t sell crack.

    • Anonymous says:

      Your “means” when you bought the most expensive asset of your life might change for the worse rather than better over 20 years. Why should the banks be the only ones to have their ass covered? Rent for life, don’t get a mortgage on this island. You’ll be screwed in the end.

    • Anonymous says:

      …especially to cops in nightclubs.

  40. Anonymous says:

    Finally this joke of a politician is trying something worthwhile.

    • Anonymous says:

      I may not have the highest regards for Kenneth personally either, but this “joke of a politician” is showing more cajones, standing up for the Caymanian people, than the rest of the Bobo the Clowns that have been warming the seats of the Legislative Assembly for years.

    • "Anonymousir" says:

      if he’s a joke, whats alden? the “joker”

    • Anonymous says:

      Maybe you didn’t take enough time to find out what he is made of before you assumed he was a joke. You see him working for the people now, which he always said he would. Working more than anyone else I see, at least some of you that were brainwashed by lies from the other side can see where this man’s heart is at. He didn’t get elected to sit back and take the money, he works his **s off for you even if you didn’t support him and still don’t support him.

      • Anonymous says:

        Of lately I have heard quite a bit of young caymanians say kenneth bryan helped me get a job .the monkey would say , my people .this young man is always on the go ,helping here and there .stop the hate . God soon give unna something else to talk bout …bunch of haters ,,hate unna own ,hate the expats ,,teach you children to love ,life will be better,…only God knows where we heading ..

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