A veteran banker says banks in Barbados owe their success to early depositors and should pay back, now that these savers are elderly and in need of reverse mortgages.
Senator Tony Marshall made the call last night as he addressed a meeting of the Men’s Educational Support Association (MESA) on the topic The Truth About Reverse Mortgages.
“The banking industry has been built on the backs of our foreparents . . . . They supported them for years. The bulk of the money that was made by banks was made from off the savings accounts,” argued the retired top banker who has served in Barbados, New York, Antigua and Belize.
“So why today should you not do something for those who contributed to your success?”
A reverse mortgage is a home loan that provides cash payments based on home equity. The money is paid off when the property is sold, or, on the death of the homeowner, their heirs give up ownership or refinance the home to purchase the title from the reverse mortgage company.
Marshall said such a facility would be a great assistance to many elderly homeowners in Barbados.
“As you drive around this country, I am sure that you see many properties, owned by senior citizens, often in excess of an acre of land. But as you look at the property, more often than not it wants painting, the windows may be dropping off or a door coming apart,” he told the group of men, most of them over the age of 60.
Marshall said that a reason for the dilapidated state of those properties, in many cases, was that elderly owners did not have sufficient income for property maintenance.
He made reference to a Barbados Association of Retired Persons-proposed amendment to the Land Tax Act that would enable retired persons 62 years or older to apply for reverse mortgages, through which banks can loan them between 40 and 75 per cent of their property’s market value.
But Marshall, a former director of Barclay’s Bank Caribbean [which merged with CIBC West Indies Holdings to form CIBC FirstCaribbean in 2002], said that the Barbados commercial banking system found the reverse mortgage repayment system too slow because it was used to having payments on loans in monthly or quarterly periods, providing liquidity for relending.
He insisted that banks could provide reverse mortgages without awaiting legislation.
“They love the money coming in, and that is perhaps the reason why they may not jump at this facility . . . . The people in this country deserve to have it.”