The board of the National Housing Trust (NHT) was to meet this weekend to finalise and sign off on a programme of assistance for NHT mortgagors, a substantial number of whom have fallen into arrears in the past three months alone.

The NHT has some 12,357 mortgagors incapable of servicing their mortgage loans. The majority, 11,517 of them, joined the default list in the October to December 2008 period, when markets and economies around the world began to feel the first real pinch of recession.

The trust said that the 12,357 mortgagors represent 15.5 per cent of its mortgage portfolio.

The NHT, as policy, already has a debt-rescheduling programme in place under which it suspends loan payments for periods of three months to two years for mortgagors in financial difficulty.

stimulus package

The NHT's board meeting comes just shy of a month after Prime Minister Bruce Golding, in his December announcement of an economic stimulus package - valued at $28 billion or more - cajoled NHT beneficiaries who might have lost their jobs and who might be behind on their mortgages to approach the NHT to reschedule their debt.

"I encourage those NHT mort-gagors who are experiencing hardship at this time not to just sit back and allow their arrears to pile up," said Golding in the public broadcast.

"Contact your nearest NHT office. Talk with them. They stand ready to work with you to find a way to work it out. I have instructed the NHT to assign adequate personnel to deal with those borrowers who may need to seek this assistance."

Earl Samuels, contacted on what assistance beneficiaries could expect and how it would affect his cash flows and future spend, said through his communications office, that the moratorium was in effect.

Later, the NHT clarified that the programme was not the total assistance package contemplated under the stimulus package and that the board had not yet signed off on the programme.

Golding suggested in his broadcast that the NHT would be offering "a range of measures", including suspension of mortgage payments, a reduction in monthly payments, rescheduling of mortgage payments, an extension of the mortgage period, and a reduction in interest rates.

"The exact treatment to be applied will vary from case to case and will be dependent on the peculiar circumstances of each borrower," the prime minister said.

The NHT's debt-rescheduling programme comes with con-ditionalities to the offer.

"Eligibility for moratorium will be assessed on a case-by-case basis and will apply to mortgagors who are having difficulties in making their mortgage payment," said the agency by email.

qualifying

If the mortgagor has lost his or her job, to qualify for the moratorium requires:

Notification of unemployment within 30 days of becoming unemployed;

Documentary evidence of unemployment (termination or redundancy letter) should be provided;

A good payment history on the part of the mortgagor.

Those who take advantage and suspend payments will likely find themselves with a higher mortgage to pay down.

"There may be instances where a mortgagor's monthly payment increases because the payments that were unpaid during the moratorium must be added to those currently due," said the NHT.

"However, where possible, a mortgagor's loan term will be extended to make the payments affordable."

The latter is often dictated by the age of the mortgagor, as "a loan term cannot be extended", the agency said, "if it would continue beyond the insurable age of 70 years".

Under the arrangement, the NHT said the total moratorium period should not exceed 12 months in the first instance. At the end of the initial 12 months, the case would be reviewed and a further extension might be granted for another period.

cash flow

The agency said while the offer would affect its cash flow, it did not yet know to what extent.

The trust at year end March 2008 reported a $12-billion growth in its mortgage portfolio to $70 billion. But in a year when its operating expenses shot up by $900 million, the housing agency also made a net loss of $300 million.

dionne.rose@gleanerjm.com