An unjust mortgage law

There is a very disturbing ad in the Sunday Sun of July 2nd, 2017. The Republic Bank has listed for sale by tender no less than 17 properties in Barbados. It may perhaps be the tip of the iceberg as the meltdown of the mortgage crisis starts to manifest itself.

It is the dream of every Barbadian to own a piece of the rock and to build a home. It represents more to the average Barbadian than the right to vote. It means a fixed place of abode, forever removing the stigma associated with the chattel house which rested on land that they did not own and could be removed at the owner’s pleasure.

That dream seems to be swiftly vanishing. One would have thought that the novelty of social mobility from the chattel house to a permanent fixture would have come with some merits that would foster protection by government.

While government can squarely be blamed for digging the pit for the homeowners to fall into as it has not provided them with the necessary legislation for their assistance, the banks are also to blame.

They appear to be a willing accomplice to government’s action, comparable to pulling the trigger of a loaded gun to ensure that the homeowners do not escape the fate of death and subsequently fall into the pit.

The commercial banks in Barbados are sitting on over $15 billion dollars. They will not topple over and die. No bank has a need for a place to rest its head at night or food to eat. It is significant to note that it is the preference of the commercial banks to foreclose on Barbadians and then sell the debt at a percentage of what is owed.

This has an effect on the landscape; there are many unoccupied houses that will become vandalized and overgrown with bush as the banks are unable to sell. For Barbadians, it is not a sellers’ market or a buyers’ market. There is not enough money in circulation.

What should also have us all worried is that this debt will be bought by foreign entities taking the land away from the persons whose navel strings are buried on the island. The people who live in Syria and Saudi Arabia should not be owners of land in Barbados.

As the mortgage crisis is now in full swing, I thought it best to read up on CAP 236 to find out what relief was written into that section of the Laws of Barbados to offer relief to Barbadians. I was left in shock. Not only does the law not offer any relief or protection to the mortgagee, it appears to have been written in favour of the lending company.

After 50 years of Independence and the creation of a vibrant middle class, one would have at least thought that by now the laws would be on the people’s side. There are no identified rights for the mortgagee.

The law offers no protection to the investment of the homeowner and that is wrong. All of the covenants are in dire need of revision. S113 states that it is the duty of the mortgagee to act in good faith and have regard for the mortgagor. There is however no reciprocal statement that the mortgagor should also act in like manner to the mortgagee. 

If Barbados truly is a nation of laws, the laws must reflect the social, political and economic well being of all of its people; not for one class and against another; not for the rich and against the poor; not for the companies and against the consumers; not for the banks and against their customers.

In essence, this Act as it relates to mortgages is socially unjust. Perhaps it has never been challenged and the time is now ripe to challenge if they do not provide equitable solutions to the mortgage crisis that the island is now facing.

Presently, Government can offer some relief based on the Act. It has the authority to change interest and set rates. However, one hopes that Government understands that this is a crisis and a crisis that will not only affect middle class housing but will have an effect on every social and economic situation on the island.

Whether rich or poor, when families are stable, communities thrive. Societies with vibrant middle classes always thrive. Refusing to act now will put the entire Barbadian middle class at risk of survival and reopening an avenue to drive the country back into a time when only the very rich and the poor existed.

In my opinion, it is in the best interest of the people for Government to:

1.    Have the courts enforce an emergency stay on those 17 properties that Republic Bank has advertised for sale on July 7th, 2017.

2.    Have the courts enforce an emergency stay on any property that has already been offered or advertised for sale by any commercial bank or financial institution registered to conduct business in Barbados.

3.    Set a moratorium on the sale of properties mortgaged by the commercial banks or financial institutions registered to conduct business in Barbados until such time as a national solution to this crisis has been devised.

(Heather Cole is a U.S.-based Barbadian who is an active contributor to public debate on domestic issues)

 

 

 

10 Responses to An unjust mortgage law

  1. Robert MacDonald July 4, 2017 at 12:14 pm

    I would assume these properties have been foreclosed upon non payment of the mortgage. If I lent you money which in effect the bank does with its depositors money, I would expect to get paid . What does the author propose the banks do?

    Reply
  2. Francia MATTHEWS July 4, 2017 at 12:48 pm

    You are SO RIGHT. The owners has no one to help them. The Government agencies if you are paying a mortgage and becomes sick or lost your job, can not help. But get this, if you are paying rent they are willing to pay off the arrears to the mighty renter. Sad times for the poor in Barbados and I find my self in this category.

    Reply
  3. Wayne P Hoyte
    Wayne P Hoyte July 4, 2017 at 1:05 pm

    you talking mortgage?

    Reply
  4. Cherylann Bourne-Hayes
    Cherylann Bourne-Hayes July 4, 2017 at 1:51 pm

    Where can I see the list of these properties?

    Reply
  5. Heather Cole
    Heather Cole July 4, 2017 at 4:41 pm

    Sunday sun

    Reply
  6. Epaphras D. Williams
    Epaphras D. Williams July 4, 2017 at 4:51 pm

    The National Anthem of Barbados:
    In plenty and in time of need
    When this fair land was young
    Our brave forefathers sowed the seed
    From which our pride was sprung
    A pride that makes no wanton boast
    Of what it has withstood
    That binds our hearts from coast to coast
    The pride of nationhood
    Chorus:
    We loyal sons and daughters all
    Do hereby make it known
    These fields and hills beyond recall
    Are now our very own
    We write our names on history’s page
    With expectations great
    Strict guardians of our heritage
    Firm craftsmen of our fate
    v2
    The Lord has been the people’s guide
    For past three hundred years.
    With Him still on the people’s side
    We have no doubts or fears.
    Upward and onward we shall go,
    Inspired, exulting, free,
    And greater will our nation grow
    In strength and unity.
    In times of great peril and deep uncertainty a nation must reach for the National Anthem and sing it from the depths of their souls.
    The National Anthem is The People’s Covenant and Constitution.
    Sing at the commencement and close of school, work, business meetings, church services. Sing it when washing dishes and doing laundry. Teach your children that The National Anthem is a mighty weapon. Now, if we ever had to believe in the authority of prophecy it is now. For, The National Anthem of Barbados is prophetic.

    Reply
  7. Verla De Peiza
    Verla De Peiza July 4, 2017 at 6:27 pm

    The article misappreciates one critical point: the mortgagee is the bank.

    It is the bank that by s.113 has to act in good faith and consider the interests of the homeowner.

    Reply
    • Heather Cole
      Heather Cole July 4, 2017 at 8:42 pm

      A correction was sent to the newspaper. I presumed it was too late to be edited.

      Reply
  8. Christopher Hill
    Christopher Hill July 4, 2017 at 6:38 pm

    Barbados mortgage contracts are the same as US with low teaser rates for a few years then a sudden rise in interest. Basically when you sign read the finest print. the bank has the right to raise the interest rate according to their net profits for that given year. Its a deep state thing.

    Reply
  9. Duane Burke
    Duane Burke July 4, 2017 at 7:41 pm

    At least they are listing them for Tender. What about the ones that are foreclosed and sold and never see a Tender? How many have been sold “privately”? It has been folklore that the ones that hit the paper are the ones that “people” did not want. It should be mandatory for all foreclosures to be tendered.

    Reply

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