Petition leads to Mortgage Law proposal

A public push to lobby banks for leniency on home mortgages has led to a legislative effort to change Cayman’s lending rules. 

North Side MLA Ezzard Miller said Wednesday that he would bring a private members’ motion in the current meeting of the Legislative Assembly seeking to create a Mortgage Law that would regulate a number of issues related to home loans in Cayman. 

Andrea Martinez-Calderon, chairwoman of the group Caymanians Against Economic Injustice, on Wednesday presented her organization’s petition to Mr. Miller, who said he planned to use that document while debating his motion on the proposed Mortgage Law. The group’s petition has seven signatures, far fewer than required to force a referendum. 

Ms. Martinez-Calderon said her organization had been trying since last year to raise awareness about a number of home loans going into default that involved instances where foreclosures occurred after 90 days of payments in arrears. 

In addition, she said a number of homeowners lost equity in those properties when the banks seized them and sold them at well below market value. Ms. Martinez-Calderon is among those whose home has lost hundreds of thousands of dollars in equity since 2012. 

“The issue is that once unfortunate circumstances hit you, they don’t know you, despite all your good payments in the past,” Ms. Martinez-Calderon said. “It’s horrible to lose your home that you’ve been paying into for 13, 15 years.” Government records revealed a sharp spike in home and business loan foreclosures in 2013 and again this year. 

Since January, banks have issued demand notices on 39 local properties that hold a total of $8.45 million in loans. At the time the notices were issued, nearly $840,000 in loan payments were in arrears for more than 90 days. 

The government reported 17 home and business foreclosures in the first three months of this year, a significant increase over 2014. 

Since 2008, the territory has recorded 192 completed foreclosures – properties that were foreclosed on and later sold. Another 180 “historical” foreclosure cases involve Cayman properties that have not been sold. 

Mr. Miller’s private members’ motion, which is advisery to the government and not legally binding, seeks to set specific rules regarding how long a lending institution must wait before foreclosing on a property that is in arrears. Current regulations state that foreclosure proceedings may be undertaken 90 days after a home or business loan is not paid. 

In addition, Mr. Miller said he envisions legislation that would help protect the equity of homeowners, in particular. He lamented various situations where higher-value homes have been seized during foreclosures and then sold at $200,000 or $300,000 less than the original purchase price. 

“These homes must be sold at proper market value,” he said. The ruling Progressives-led government has not commented on Mr. Miller’s motion, but two government ministers have indicated they are investigating the mortgage arrears issue. 

Finance Minister Marco Archer said earlier this year that the number one reason given by families who lost their homes in foreclosure was the breakup of the family unit, generally through divorce. The second most common cause was loss of employment. 

Mr. Archer and Financial Services Minister Wayne Panton have embarked on a series of public informational meetings in recent months aimed at assisting residents with financial planning. Mr. Panton said he believes local banks will work with local homeowners if they truly fall on hard times and are otherwise acting in a fiscally responsible manner. 

North Side MLA Ezzard Miller accepts a petition from Andrea Martinez-Calderon
North Side MLA Ezzard Miller accepts a petition from Andrea Martinez-Calderon, chairwoman of Caymanians Against Economic Injustice, asking government to change the rules regarding home and business loans. – PHOTO: BRENT FULLER


  1. I wonder if Mr Miller is familiar with the subprime mortgages and housing crisis that nearly destroyed the US economy back in 2008. Largely fueled by banks being forced into subprime mortgages, also fueled by zero interests rates and zero down payment, creating *loans* which people could not *actually* afford then later defaulted by the millions. One would think not to have inept government officials clueless about how finance and the economy actually works meddle with private sector policies. Especially lending policies banks operate by to protect against risks, whilst remaining profitable so they don’t go under in turn losing everyone’s money and shaking up the national economy to a grind halt. Sounds familiar?

    You want better loans? Increase the availability of cash in the economy, increase the private sector investments, increase influx of money from overseas, relax business/investment immigration laws, and boost competition. Tourism is great but its certainly NOT the main pillar of our economy. Finance is, Banking is. Banking at least used to be. On its way to take a serious nose dive within the next two decades with these politicians at the helm.

    You have the exact opposite now. Banks act like they’re doing you a favor to take cash and deposits. Why because of morons in the LA signing us up to legislation that not only break national laws, rather make it 10 times as hard to bank than in the US and other EU nations. And its not the banks coming up with these regulations, its the clowns that sign us up to them.

    This is the kind crap that happens when financially uneducated politicians start acting as if they knew anything about finance.

  2. It is very sad when people lose their homes. On the other hand, I don’t think any bank forced them to take out a loan.

    In fact it was the exact opposite. Banks, rightly or wrongly, make people jump though hoops to get a loan. Certainly they should try to work with people who have a short term problem. And I’m sure they do.

    Most banks DO NOT WANT FORECLOSED PROPERTIES. And if they have made a loan at 90% Loan to Value, that is with a 10% down payment and then SELL the property at a 20% discount then it is clear they have LOST the difference of 10%.
    (House bought for $100,000. Loan of $90,000. Sold after foreclosure for $80,000. Loss of $10,000).

    Why do these houses sell at a discount? Because typically they have not been maintained for months or years and need serious repair work.

    AJ, you correctly point out the problem with opening local bank accounts.

    A British friend walked into a major Florida bank last week with their passport. 10 minutes later their bank account had been opened.

    Meanwhile that same USA has forced terrifying laws on OUR banks that make them reluctant to open new accounts. Even after they have provided a passport, utility bills, two letters of referral from professionals etc.