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Smith thinks mortgage plan was ‘noble’ effort

  • James Smith.

Guardian Staff Reporter

Published: May 21, 2013

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Former Minister of State for Finance James Smith suggested recently there was not much more commercial banks could have done to guarantee the success of the government's Mortgage Relief Plan.

Smith, chairman of CFAL, said the government’s plan presented last September was an effort at best.

“I think that it is noble in itself, but in terms of something happening, well something did happen, except that the initiative would have started with the banks themselves,” Smith told The Nassau Guardian in a recent interview.

“So it is not like people weren’t assisted. They were assisted...I guess you can go back and rework that plan, and basically decide on which group to target, and the extent to which a direct subvention would assist.”

Smith said it would be difficult for the government to assist unemployed homeowners without giving them an outright grant, something he believes would not be the best use of government resources.

“This has been going on since 2008 or thereabouts, and so they (commercial banks) had pretty much done whatever was quite possible, and [who] would have been left over, [who] they couldn’t help, would have been those sort of pretty bad cases where the persons permanently lost their job,” he said.

“The government program I think was really trying to say, ‘let me work with you and is there any way in which we can assist’, and clearly what would be left, after the banks would have done their work out program, you are actually left with probably nothing.”

Minister of State for Finance Michael Halkitis revealed a few weeks ago that the plan had failed to help a single homeowner.

Prime Minister Perry Christie has since said several people will be helped.

Progressive Liberal Party (PLP) Chairman Bradley Roberts had suggested that the banks should share some of the blame for the failed plan, as it was based on “market intelligence” from commercial banks.

Paul McWeeney, managing director at Bank of The Bahamas, said recently that since the onset of the financial crisis a great deal of restructuring has been ongoing at the institution to keep as many Bahamians as possible in their homes.

He said those who are left are those who simply do not have cash flow.

He said the major problem homeowners are facing is unemployment and “if you don’t have a job, the ability to give assistance is limited”.

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