Opposition leader says gov’t misses point
Eighty-two percent of the people who received loans from the Cayman Islands government’s former Save the Mortgage program between 2011 and 2013 have defaulted on their bank loans, Finance Minister Marco Archer revealed Monday.
In addition, 62 percent of the 143 applicants approved for the government loan – about 88 households – defaulted on their government-guaranteed loans of up to $20,000, Mr. Archer said. Those defaults occurred despite a six-month grace period on loan repayments, with zero interest charged and up to a 50-year repayment period.
“[These delinquency rates] clearly indicate that the Save the Mortgage program was not effective or did not have the effect that it intended,” Mr. Archer said. “The majority of applications have once again defaulted on their bank mortgages, despite receiving assistance from the government.”
Mr. Archer’s comments came in response to a private members motion filed in the Legislative Assembly by Opposition Leader McKeeva Bush that urged the Progressives-led administration to intervene in what he called the worst cases of home mortgage default to “immediately set aside enough funds to address the most needy and worst cases to be able to save those houses involved.”
Mr. Bush had indicated that the “worst case” scenarios of pending foreclosures could be assessed by meeting with local banks.
“[The government] can’t sit back and say they have $120 million in surplus, which we [referring to the former United Democratic Party government] got for them, while people are losing their homes. It’s nonsense and it’s heartless.”
The opposition leader said Mr. Archer’s response to the motion – criticizing the Save the Mortgage program created under Mr. Bush’s former government administration and funded with some US$2.5 million paid by Dart Realty Cayman Ltd. – entirely missed the point.
“I left this [motion] wide open for the government to do whatever they could,” Mr. Bush said. “I didn’t ask them to do any Save the Mortgage program.”
“I’m not ever surprised when I ask this government to do something because…they are going to get up to say ‘This is what you done, and this is how bad it was.’ I’ve listened to the excuses. It is the voice of Jacob, but it is the hand of Esau.”
The last part of that statement is a biblical reference, apparently inferring that Minister Archer’s comments on the issue were being prompted by his party’s political leadership.
Mr. Archer said U.K. requirements for government’s operating cash – agreed to by then-Premier Bush in 2011 – required Cayman to have 90 days of available cash or cash equivalents on hand by Dec. 31, 2015.
While he didn’t speak out against the arrangement, the finance minister noted that the US$2.5 million provided by the Dart group for the Save the Mortgage program was less than the $2.71 million in affordable housing fee concessions it was granted as part of the National Roads Authority agreement under the For Cayman Investment Alliance deal.
“This country has to be very careful as to the revenue that we collect and what we choose not to collect, because when you have sufficient reserves, you are much better able to react to the needs of your people,” Mr. Archer said. “When we make hasty decisions, we sometimes find ourselves looking back and wishing that perhaps we had not taken that path.”
Mr. Bush said Cayman had become quite familiar with this line of rhetoric from the current government administration.
“If it wasn’t that Dart was in operation today, 25 percent added to our GDP would be gone,” Mr. Bush said. “For 18 months we have languished in this assembly, in this country, with the same attitude that we just heard. I asked [the finance minister] ‘Did you go and check to see what the value that this $11 million…received in concessions [as part of the NRA agreement]?’ Is it $100 million [the Dart group] put in or what?”
Mr. Bush said he had received no response on that from government.
“Help Caymanians? No boy, that’s not what you’re doing,” Mr. Bush said.