Reverse mortgages in the Bahamas? It sounds like a great idea to me, but former chairman of the Bank of the Bahamas, Al Jarrett doesn’t think it would work in the Bahamas. "It sounds good to North Americans and Canadians, but I’m not sure we have a wide enough banking system and capital market to pull that off," said Jarrett.
"It’s a very complex mechanism that would require knowledge and training before you could do that because Bahamians by nature don’t like anyone holding their property without them having ownership, even if they want the money."
Nderoa Saunders, a journalist for the Nassau Guardian Business newspaper, writes that such a program in he Bahamas could stand to transform the lives of many of its nation’s senior citizens who are now scraping by on National Insurance payments which often fail to meet living expenses.
While Jarrett acknowledges the benefits attached to reverse mortgages, he asserts there are simply too many reasons stacked against it working here in The Bahamas, namely, the need for substantive legislative changes to banking laws and the challenges of overcoming the longstanding culture of passing property from one generation to the next.
"They work well in Canada when you have mechanisms in place to give people property rights," he said Tuesday, "but in a country where you don’t have correct legislation and laws are lax in dealing with property and there are unscrupulous lawyers in the system, It will be very difficult to introduce something like that."
It’s those impressive numbers and the maturity of our local insurance market that will likely result in at least one local company introducing reverse mortgages by 2010, said one analysts.
Reverse mortgage may find home in Bahamas