Ten Point Mortgage/Foreclosures Plan


1.  Work with the banks and other institutional lenders to agree to a 120-day moratorium on foreclosures. This 120 day moratorium would allow for
the appropriate consultation to take place within the financial sector and
with the Central Bank and it would also allow the necessary legislative
authority for the items below to be put in place.

2.  The government will work to obtain the agreement of the banks to a
write-off of 100% of the unpaid interest and fees for those mortgagors who
are facing foreclosure. This should be acceptable to the banks as they would
already have made provisions against these losses. Therefore, writing off
the unpaid interest and fees would have no immediate financial impact on the
banks. As for the delinquent borrowers, they would benefit from the fact
that their outstanding balances would fall substantially, thereby increasing
their equity in their homes while lowering their debt.  Essentially, they
would be placed in the same position they were in before their loans became

3.  We will encourage a reduction in the interest rate on the mortgages in
question to Prime + 1%. This would be substantially below what most
borrowers are paying, reflecting the impact of the government guarantee
described below.

4.  We would encourage the banks and other institutional lenders to extend
the loan repayment period under defaulting mortgages to the maximum allowed
by the financial institution.

5.  In return for the banks agreeing to the four elements above, the
Government, for its part, would guarantee the interest payments of the
affected borrowers for 5 years through 2017.

6. To assist borrowers who may not be able to meet interest payments and to help ensure the sustainability of the Government’s guarantee, we will create a special fund into which borrowers would pay a reasonable annual service fee based on factors such as the payment history of the borrowers, practicable realities of the borrowers and their outstanding loan balances.  This fund would be used to help meet the obligations of those borrowers who cannot pay their interest through 2017.  The collective contributions to the fund would assist the Government to cover the interest costs of those borrowers who fall into delinquency.  This, in turn, would help reduce the direct cost to the Government if called upon to make good on its guarantee.  The Fund would be there to cushion the cost to the Government and by extension reduce the ultimate burden on the taxpayer.

7.  We will pass legislation, if necessary, to ensure that homeowners who
have accumulated savings in their pension funds can access those funds for
the purpose of saving their homes from foreclosure.

8.  We will pass legislation if necessary to protect homeowners from
foreclosure where they have already paid back more than a certain percentage
of their mortgage loans.  This will require close consultation with the
banks and other interested parties. Once you have reached a certain level of
home mortgage debt repayment, you should have some assurance that you will
no longer be in danger of losing your home.

9.  We will extend the ³first homeowners² exemption from stamp duty to
persons who lost their first home in foreclosure but are trying to buy a
home once again.

10. And we will pass legislation to give greater protection to borrowers in
relation to interest, add-on charges and other bank fees; and to bring under
regulation all those unregulated lenders out there, be they insurance
companies, furniture stores, and others. This new legislation will also
bring under stricter control and supervision the system of salary deduction
so appallingly abused by certain financial institutions.