NHT recruits debt collector as arrears climb
Published:Sunday | March 11, 2012 | 12:00 AM
Avia Collinder, Business Writer
The National Housing Trust (NHT) plans to hire a bad debt collector to go after mortgage delinquents, whose loans are more than three months past due.
The state agency last week invited bids from qualified firms, which have until March 27 to respond.
NHT's non-performing loan portfolio has remained at about J$1 billion for 18 months. Its plan to oursource the collection signals that it has run out of patience with mortgagors that have ignored entreaties to bring their loans into compliance.
On February 7, the mortgage lender released information indicating that at the close of 2011, 15,823 loan accounts or 17.23 per cent of the total loan portfolio reflected arrears of three months or more.
These accounts had arrears value of J$1.015 billion or about one per cent of the total portfolio value of about J$99 billion.
The tender notice for the debt collector published March 4 said the recruit would be required to chase down the holders of active accounts whose loans are "90 days or more past due and loans for which more rigorous or investigative collection services are required".
The problem for the trust is the same as that encountered at start of year in 2011.
The data shows that NHT made limited progress over the course of last year in reducing delinquency.
At December 2010, there were 15,478 loan accounts in arrears or 17.74 of the total loan portfolio. These accounts had an arrears value of J$989 million or about one per cent of the total portfolio value.
Eased its policy
At the height of the recession, when job cuts were rampant, the NHT eased its policy in the difficult economic environment and offered mortgage holders who were behind on their loans leeway in restructuring payments.
Unlike private developers and lenders who have been actively foreclosing on properties, the NHT does not.
Options offered included a payment plan to liquidate arrears; restructuring of mortgage loans for a specified period; extension of the loan term; temporary reduction in mortgage payments, which may allow interest-only payments for an agreed period; and a moratorium, or suspension of mortgage payment for three to 24 months. Insurance fees must still be paid during the moratorium period.
Up until February, the trust was also running advertisements inviting homeowners experiencing difficulties to come in to discuss ways of getting rid of outstanding arrears.
For the last three years, the housing agency has referred for sale by public auction less than two per cent of delinquent properties.
Last year, 240 properties were sent to auction, compared to 295 in 2010 and 198 in 2009.
Homes owned by delinquent borrowers which have been sold by private treaty amount to 67 to date for the 2011-12 financial year, compared to 74 sold in the similar period in the previous financial year.