Here's an idea. Instead of allowing mortgage withdrawals or building so-called low-cost housing, the government should guarantee 20% of first-time Caymanian mortgages. Pension withdrawals are OK in the current environment, but risky in the long term when people age into retirement. Low-income housing built in one location is at risk of becoming an instant ghetto and stigmatizes purchasers. But banks need to reduce their risk by having a spread of 10-20% in equity, in case the purchaser becomes insolvent. The government can guarantee that risk for 20% of mortgages of up to 105% of property value, for up to 5 years, thus reducing the risk to the bank without taking on any significant financial obligation. Even if 10% of purchasers who qualify fail to make their mortgage payments, the maximum exposure to CIG is much less costly than building edifices to political egos or destroying the future pensions of Caymanians. I know it is over-simplification, but it would take $100m in mortgage defaults in the first five years, for the government to be liable for $10m spread over 5 years. to further reduce their risk, the government can put a cap on such a scheme, maybe on an annual basis. Home purchasers are hardly likely to pick up the properties and escape to Little Cayman. The benefits are many more Caymanian's getting access to homes without any upfront spending by the government. How many first-time Caymanian home purchasers are there?
Espace publicitaire · 300×250
