More banks join government mortgage scheme

| 28/08/2010

(CNS): Two more local high street banks have joined the government’s mortgage guarantee programme to enable more Caymanians to access mortgages. Butterfield and FirstCaribbean International banks will each offer an additional $5 million sum for home loans to local people who can afford a mortgage but cannot find the 25% cash to put down with the bank. The deal with the two banks was signed on Wednesday bringing the total of retail banks supporting the initiative to six. Since its inception the Government Guaranteed Home Assisted Mortgage (GGHAM) programme has helped 269 people get their own homes.

 
Butterfield and FirstCaribbean International had previously committed $10 million each which has already been disbursed but the extra five million will help assist more families.
 
In existence since 2007, the GGHAM assists Caymanians who qualify for traditional commercial bank mortgages, but who are unable to accumulate the required five to twenty percent deposit. Government guarantees 35 percent of the total mortgage enabling clients to access a loan without having to find the usual down payment. The banks then grant mortgages based on both the guarantees and the client’s eligibility. Customers must remain in good standing with their banks to retain their guarantees.
 
In addition to Butterfield and FirstCaribbean, GGHAM currently has agreements with Cayman National; Fidelity Bank (Cayman) Ltd; Royal Bank of Canada and Scotiabank & Trust (Cayman) Ltd.
 
Mike Adam, the minister with responsibility for housing applauded the banks which have already approved some $47.5 million in loans to the 269 recipients. “These are impressive figures and we hope to see them expand even further as the programme continues to grow,” he said.
 
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  1. Anonymous says:

    Sorry, not sure I am following all of this. If the markets are slow and it is obvious that the majority of people residing in Cayman can not afford to put down 25% on their own home, why not lower that margin altogether?

  2. Bang Craytes says:

    No Sir,

    We do not like this whole concept because it demonstrates that Cayman is truly controlled by "Money" people.

    Apparently, the government has to jump through all kinds of hoops to get loans, but the people of Cayman can get one with a government guarantee?

    Hello???? Alarm bells anyone. To those of you that benefit from this corrupt, "Print money out of thin air and charge people for it" scam known as the FIAT system, please move on, thumbs down duly noted.

    To people who are considering this, don’t bother. It will be a noose around your neck for a significant part of your lives and you will not be able to take it with you when you go. Please get out of debt, save up and spend wisely. Do not use credit cards, nor borrow money for vehicles or worthless educations that get you worthless jobs. You WILL regret it.

    The world is full of rich people who are dead and buried and guess what? Not one of them took anything with them, EVER! It is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of God.

    Why waste time chasing treasure that will deteriorate over time? Seek the treasure that never fails, to do good to your fellow man and to love our Creator who has given us life.

    Anyway, my dear friends, please think very hard about this before you commit. Also make sure that at all times you have enough water and food to get you through rough times. You just never know what is around the corner.

    Please, please, please….do NOT get into debt. No more loans. If you cannot afford it, DON’T buy it.

    • anonymous says:

      Stop the nonsense. You  must be an x-pat that don’t want the people to get ahead and if you’re a Caymanian then you are ‘A JERK!"

      every government worth its salt  will guarantee a loan or down payment for the people to get a mortgage to buy a home. In the form of a grant or otherwise.

      The Us has the same program for home owners so what’s your beef dude or dudess. YOu must be the PPM and scared of the UDP sweetening the people to vote!   but to do this out of a selfish heart is a wicked act. YOu should be happy to see people getting their heart’s desire. So many of them had their houses destroyed. Several Weeks ago a lady wrote a letter in this forum asking the premier to take some of those monies and build affordable homes for the people. As it is right now, the government should be doing even better than providing a downpayment. They have gotten a hold of $15 % million dollars for heaven sakes ! You mean to tell me you want all that money from the uk to be wasted and the people get nothing? shame on you.

      • Anonymous says:

        Dear Mr(s) Banker,

        I am a Caymanian and the recipient of one of these schemes back in 1998.

        I can tell you that I paid well over $250,000 for a crappy townhouse which I barely managed to get rid of for $170,000, so when people say don’t get into this kind of debt, perhaps they know what they are talking about.

        Shame on you, pal.

        So Caymanians only deserve to be at the bottom of the totem pole? Schemes like this only prolong the agony.

        Successive governments have one very little to help us Caymanians and yet they come up with buzz phrases like "Caymanian Protection Law".

        Caymanians have been sold down the river by the elite and that is a fact. Now be a good boy and run home to Mommy.

  3. Anonymous For Cause says:

    To the posters on discrimination:  Why do you persist on holding the Cayman Islands to a higher standard than all other countries and territories?  No Caymanian with only one passport can go to another country and qualify for housing assistance from their Government.  If we are not financially self-sustaining  we are not even be allowed in.

    By the way, I don’t qualify for the GGHAM either as I have a home and a mortgage to show for it!  I think the GGHAM  when working correctly as it was originally intended is a very good program.  I know the struggle that many of my peers and I went through to own our own home and we were considered to be amongst the upwardly mobile, university educated and hard-working (yes!) professional set.

    Finally, to give credit where credit is due,the program was spear-headed by Kurt Tibbetts and the previous PPM led Government. Continuing in that vein, I am pleased to see that the current UDP led Government in this instane is continuing what was started instead of tearing down and starting over.

    • ex-pat eric says:

      I thought all Caymanians by nature hold two passports, or at least eligible?

    • Anonymous says:

      A Caymanian with one passport will be a very rare creature indeed. Every Caymanian is automatically entitled to a British passport, and a substantial number will also be entitled to a US, Jamaican, Honduran or Cuban passport.

      Any Caymanian could land in Britain tomorrow and be entitled to the same privileges and benefits as the British equivalent of the "born Caymanian". All some people want is reciprocity. You wouldn’t be over-run with Brits if that did happen – the cost of living is too high and, believe it or not, not everyone in the world aspires to live here.

      • Anonymous says:

        Nonsense. To have a Caymanian Passport (really a BOTC passport – there is no such thing as a Caymanian Passport) you must be a British Overseas Territories Citizen. There are literally thousands of persons who are Caymanian but who are not British Overseas Territories Citizens.Similarly there are thousands of British Overseas Territories Citizens who are not Caymanian.

        There is no blanket entitlement that you speak of.   Many Caymanians cannot become British Overseas Territories Citizens and may BOTC’s cannot become Caymanian.

        • Anonymous says:

          I accept that there may be thousands of BOTCs who are not Caymanian. That is a separate argument.

          As for the thousands of Caymanians who aren’t BOTCs… really? The naturalisation requirements are, inter alia, 5 years residence, together with 12 months of the right of permanent residence. There really cannot be many Caymanians who do not fit those criteria. Of course, another criterion is "good character". Maybe that is the problem?

          • Anonymous says:

            BOTC’s not being Caymanian is not open to argument. Being Caymanian is a Cayman Islands Immigration Law defined concept. It is actually a type of immigration permission -PR on steroids – except unlike most immigration permissions it can be inherited/passed on in some insttances.

            Being a BOTC is governed by the British Nationality Act. It has nothing to do with being a Caymanian, although most "traditional" Caymanians are also BOTC’s (they used to be British but that was unceremoniously taken from them some years ago), large numbers of "newer Caymanians" are not.

            If, for example, you are a cabinet status recipient and have a prior conviction, you cannot become a BOTC. If you have not been resident here for 5 years, you cannot become a BOTC. If you cannot speak English you cannot become a BOTC. If you have no intention of remaining Permanently in Cayman, you cannot become a BOTC.  If you are the child of status recipient,  are here, and have become Caymanian by entitlement but will lose that right on reaching 18 you may not be able to become a BOTC. If you have been outside of Cayman for more than 450 days in the last 5 years, you may not be able to become a BOTC.

            etc, etc, etc…

             

            So yes, the answer is thousands… AND it is untrue to say all Caymanians can have British Passports. Many cannot even get Cayman Islands passports.  

             

            • anonymous says:

              LOSING CAYMAN STATUS AT AGE  18

               

              Sheri Bodden Cowan and the Board should by now matured and fix this stupid problem.

              I have never in my life heard of such a stupid not to mention incomprehensive immigration policy;

              That a child born to Caymanian parents can keep their Cayman status riding on their parents up to age l8 after that they lose  it !  Who drafted this dumb immigration law please tell us?

              If the child is born to Caymanian parents whether overseas or in the cayman Islands, there is no way under no seen or unseen or unknown or underlying circumstances that that child born to two Caymanian parents should lose their status at age l8.

              Sherry Bodden-Cowan and McKeeva Bush

              ITS TIME TO CHANGE THAT STUPID IMMIGRATION LAW.

              IT MAKES NO SENSE AND YOU ARE HOLDING THE COUNTRY BACK BY BLOCKING BRILLIANT MINDS. SOME OF THEM ARE FUTURE SCIENTISTS, FUTURE BRAIN SURGEONS, MEDICAL DOCTORS, AND FUTURECHIEF JUSTICES SO  ;BIG MAC AND CHERRI BODDEN COWAN PLEASE CHANGE IT!  you are doing your own people a grave injustice by shooting them in the head.

              !

              • Anonymous says:

                Relax – if you were born to Caymanian parents you do not lose it at 18. If you were born to expat parents who subsequently became Caymanian, and you are of good character and have lived here for several years before being 18, then you can keep it as well (but you have to apply). This is nothing new, it has been this way for more than 30 years and actually works well in most cases.

                Think about this from your high horse. Pretend that someone with no Cayman connections got a Cabinet status grant. Let us pretend they are from Iceland and had only been here for 2 years. They then leave and return to Iceland. They marry an Icelandic girl and have two kids – one son, and one dottir. The son and dottir grow up and have lovely Icelandic lives. They are Icelandic citizens – but guess what? Because they were born to a Caymanian father, they are both Caymanian. Now, let us say each of them marries other Icelandic nationals and then have children themselves.  These grandchildren of a Cabinet status recipient, who have themselves never been to Cayman, and whose parents have never been to Cayman, will be Caymanian. And their children, and their children’s children, and their children’s children’s children…

                At what point do you start thinking it is appropriate for someone to lose the right to be Caymanian on turning 18?… 

                This is far more complicated than it seems to the unfamiliar. There are good, valid, and appropriate reasons for many of the things you find offensive. It is also up to Government to change the Law, not the Boards.

                  

                 

                • anonymous says:

                  I think what the person was trying to say is that a child born to Caymanian parents overseas with proof of Caymanian parents should not have to apply for Cayman Status that the child  at any age, l8 or not should not have to apply but should automatically get a form of acknowledgement of Caymanian status with provided proof of Caymanian parents and without red tape like everyone.I think the system encourages cabinet interference and corruption. Granting status to people that will hurt us and blocking those good people who would be a credit to society. As it is right now the cabinet should never be involved.

                • anonymous says:

                  Then why is it that some children born to one Caymanian parent and the other parent is an x-pat father American, mother Caymanian the child had to apply when she got 18 ? was this  bad advice? because according to you  the child born in the US and lived in Cayman until l8 or even l5 or l6 should not apply at age l8? You’re saying they’re still Caymanian right? And no need to apply?

                  Then why did immigration ask for$250 and application and references for them to apply if its been that way for 30 years some have applied in error is that so?

                  Has here been a double standard politically influenced?

                  What’s the difference if the mother or father is Caymanianian you are stressing "Born to a Caymanian Father!" does the father being Caymanian give the child imediate Caymanianian status is it any different if the mother is Caymanian. I would be certain of a mother being the mother but there is always a chance of a ":Jacket case !"

      • Anonymous says:

        > entitled to a British passport.

        This does not automatically mean that Caymanians will apply for one. I know of many that are in fact skeptical of doing just that.

        • Anonymous says:

           Why are they sceptical? I’m not trolling, I’m genuinely interested.

  4. Whizz Dom says:

    The discrimantory nature of this scheme could give permanent residents who would eligible but for their nationailty a legal claim for damages for the extra costs they have incurred.

    • Concerned Caymanian says:

      It is not legally possible, save in exceptional circumstances, or for short periods, to seek or maintain PR in the Cayman Islands if you require assistance from the Cayman Islands Government. It may be preferable to those you are seeking to defend that you not protest too much.

      • Whizz Dom says:

        This is not a matter of Cayman Islands law, which is trumped by the UK’s Human Rights obligations.

  5. The Crown says:

    Yes sir, those are some impressive figures,good to see you doing something. Some even more impressive figures: (moderately) 800 x 12 = CI$9600.00 x 30years = CI$288,000.00 – intial sum borrowed of CI$80,000.00 = CI$208,000.00 with a outstanding borrowed sum of CI$40,000.00 still being paid on at a rate of CI$9600.00 p.a,impressive indeed. The height of usury,shouldn’t house loans be written off after 30years, i mean come on! This type of accounting is why “Third World ” countries will never rise above their debt. How much is enough for a share holder? I wonder what some may have to become or abandon of their identity as a Caymanian to meet these arrangements. It’s never enough for share holders yet they have the face to call people lazy. From my view there’s no difference between usury & laziness.Only that one is far reaching & more sinister than the latter.

    • Anonymous says:

      Then save the money and buy the house cash – or borrow the money from family – or rent. 

      If you don’t like the bank’s rates, then don’t use them.  Its pretty simple.

      • The Crown says:

        Now here’s one for the comedy section..The whole point is that little word “usury”. You do realize that by the time the loan with the figures i gave is paid off the total amount paid back will be CI$432,000.00 for a intial borrowed sum of CI$80,000.00 & the loan will be 45years old. Still think it’s simple? Banks need people,people need banks but a excessive rate of interest only serves the bank while the borrower is chasing their shadow. Are you in the same time zone? Ask anyone you know thats renting if their happy with money going to what they dont own,every month. Lastly my little social rebounder cash is illusive to many,prices in this country means you need tons of it if you want “saving” to exist in your vocabulary.
        ‘”

        • Disturbing... says:

           And to many we may have to go back to the oldest trade in the book… Cause we haven’t seen the bottom yet… Rent, Mortgage or otherwise…. Down the rabbit hole we go…

    • Que says:

      I calculate the interest rate to be at 2% based on your numbers which is very low from a business point of view. The bank could potentially use that money to earn greater returns with something else. At the end of the day its about risk and how the bank manages it. Normally, the higher the average risk for a group of loans, the higher interest rate will be. If say the bank makes 10 loans at 80,000 each, that is of course a total of 800,000. If say one loan needs to be written off because of non-payment, that immediately means the bank is at potential loss of 80,000 (ignoring selling the property for simplicity) which needs to be recovered from the group of loans in the form of interest.

      No, house loans should not be written off after 30 years. A loan is a business transaction and needs to be honored by both parties. You do touch on an important point but directing it to wrong people. Banks are businesses and are not there to promote social or charitable initiatives. Their shareholders are risking their own capital to generate a return, literally and figuratively that is the bottom line. If people need financial assistance for reasons outside of their control it is really up to their government to provide the assistance. It is not good practice to force a bank to enter into a transaction which it believes does not make good business sense.

      Btw, I don’t work for a bank but I do try and understand how the business works. There is no point in fighting against business principles.

    • Calc says:

      I think your calculations may be off, not commenting on your stance, but running an $80k loan through one of those handy website calulators at 5% paying $800/month and you would have it paid back in 10 years with a total re-payment of $102k.

      If I use the 30 years example you mentioned, the repayments are $430 per month and a total repayment of $155k.

      There would be a fair amount of inflation decay on the 30 year loan as well, so borrowing $80k today and buying what you can with that would probably get you more than $155k in 30 years would.

      If your anger is based on unsound calculations do the above numbers placate you?

      • The Crown says:

        Interesting. Very interesting.. No. I’m not pacified at all with the guile from lending institutions. Am, some (invisible) factors seem to be at work when it comes to borrowing. You can have a person with a 30year loan who pays approximately the figure i mentioned per month,for a 4 bedroom,2 bath house. Then in a similar location you have a person paying CI$1500.00 per month for a 4bed,2 bath as the terms of their new loan. But if you or Que feel it’s ok to pay the bank back almost triple,hey,thats a individual & ultimately a choice.It’s a rip off anyway you look at it.My advice to the young families making a start,do your best in not going to the bank. It wont take 30years to build a house.But that’s the catch, how do you rent & build at the same time. Not too long ago we Caymanians were together alot more. Houses went up in a blink of an eye & ingenuity produced miracles in relation to cost & achievement. We need to get back there,with the respect & the consideration of seeing our peeps trying to do what is necessary. p.s My career in banking was a exceptional one,retail & offshore,therefore i know the industry well,that’s why i left.