The National Housing Trust, NHT, is estimating that it will forego some $418 million in loan repayments for this fiscal year ending March 2021 from the special measures implemented since April to assist persons who have fallen into financial difficulties due to the pandemic.
Data from the state-run housing agency up to September shows that the delinquency rate for mortgage payments jumped to 15 per cent on loans that were 180 days past due, three percentage points higher than last year.
The defaults were significant among women, as well as the age 18 to 29 age grouping – the same gender and age group that the NHT in March highlighted as moving more aggressively towards real estate purchases, based on loan disbursements.
But the largest group affected was the age category 60 and over, among whom defaults climbed five points to a delinquency rate of 24 per cent.
Days after COVID-19 hit the shores of Jamaica in early March, the Government ordered the closure of several businesses, and with it came job losses and fallout in household incomes.
By March 19, the Holness administration had announced a raft of measures to safeguard persons from losing their homes, including a six-month moratorium on all loan payments, effective April 1, for mortgagors who were laid off as a result of the measures taken to control the spread of the virus.
A special one-off offer was also put in place for mortgagors to reschedule delinquent loans with a moratorium of up to 24 months or a reduction in interest rates under the NHT ‘Fresh Start’ facility, once the NHT had not already entered into a commitment to dispose of the property.
The Government’s announcement came ahead of Statistical Institute of Jamaica data, which, in August, showed that some 57 per cent of households had their income reduced as a result of COVID-19. The tally of job losses for the month of July were at 54,000, with males accounting for more than half the individuals that lost jobs.
“Between April 1 and September 30, 2020, those individuals were asked to put their application in writing, along with the relevant supporting documentation. Applications submitted by April 30, 2020, received 100 per cent waiver on all unpaid late-fee penalty. Applications submitted by May 31, 2020, received a 50 per cent waiver on all unpaid late-fee penalty.
“Based on applications received for moratorium as at September 30, 2020, the Trust is likely to forego approximately $418 million for the period,” the NHT said.
The state agency noted that its general procedures to treat with delinquency were guided by a number of factors to include the reason for non-payment, the mortgagor’s ability or willingness to repay as well as their individual circumstance.
“Where a mortgagor is delinquent due to job loss or illness and has expressed an interest to maintain their loan account, the Trust will utilise its Special Assistance options to include a moratorium on the loan (break in payments), interest rate reduction, among others, to manage the arrears,” NHT said.
Contributors over 65 years old are designated as ‘voluntary contributors’ with extended access to housing benefits up to age 70. Previously, the cut-off was age 65.
JN Bank, which holds the largest private mortgage loan portfolio in Jamaica, declined to comment on delinquencies by its borrowers but noted that it structured and outlined a comprehensive response programme in April to help its members navigate the challenges.
“This included relief for our mortgagors, who could access a moratorium of up to 12 months on their payments; re-advance mortgages or reverse mortgages to support them during this period,” said JN.
“These options have brought relief to several of our members, and we continue to provide support to those who request our assistance during these difficult times,” the bank said.
