Clarien & BHC Offering Mortgage Programme

January 19, 2017 | 36 Comments

Clarien Bank and the Bermuda Housing Corporation [BHC] announced they are to “partner in an innovative new programme to enable more Bermudians to own their own homes.”

“Under the HomeStart programme, Clarien is making $25 million worth of new mortgages available with up to 100% financing available to existing BHC tenants or clients who are able to make repayments but lack the necessary funds for a 25% down payment,”  the announcement said.

“BHC will guarantee the top 25% of each individual loan between 75% and 100% made by the Bank. Properties currently under the control of Clarien as well as select BHC-owned properties will be made available for purchase under the new initiative.

“First time home buyers will have the opportunity to purchase the properties in ‘as is’ condition at a more attractive cost or allow the Bank to refurbish to an acceptable standard.

“Mortgages will be up to 30 years [subject to age criteria] and although Clarien has recently announced a base rate increase it will honour its previous mortgage rate of 6.50%, less a discount of 0.325%, through 2017 for HomeStart loans.

“Applicants will be pre-screened by BHC and must be Bermudian and not previously have owned or have partial ownership in a home. Trusts and other forms of ownership will not be eligible.”

Major Barrett Dill, General Manager, Bermuda Housing Corporation; Andrea Proctor, Senior Mortgage Lender, Clarien Bank; Francis Richardson, Permanent Secretary, Public Works; Craig Cannonier, Minister of Public Works; Ian Truran, CEO, Clarien Bank; Karen Brown, Head of Lending, Clarien Bank.

Clarien-BHC

Ian Truran, CEO of Clarien Bank, commented: “We are delighted to be part of this initiative, which we hope will put home ownership within realistic reach of more Bermudians.

“Finding the money for that 25% down payment is what puts home ownership beyond so many hard-working and deserving people – even though they are more than capable of making the mortgage repayments.

“Owning your own home is a source of pride and security for a family and we hope that through this programme, more Bermudians will have that opportunity. It is in the spirit of what ourselves and the BHC are trying to achieve that will be waiving our normal fee on mortgages arranged under this scheme as well as providing a discounted mortgage rate.

“HomeStart very much reflects our values and broader responsibility as a local company to the community we serve, as shown through the Clarien Foundation’s support of many local charities, and our annual Holiday GiveBack Programme which has raised more than $84,000 for Meals on Wheels. We believe that a broader home ownership base promotes economic stability and social responsibility for the Island.”

Major Barrett Dill, General Manager of BHC, stated: “The Corporation has been diligently working on finding solutions to the recent challenging state of the local residential Real Estate market and welcomes this partnership with Clarien Bank.

“It is our hope that this joint venture will help positively stimulate the real estate sector as Bermuda continues the recovery from the devastating effects of the economic recession of past years.

“Our stated mission is to provide accessibility to adequate, affordable housing and promote independent living to enhance the quality of life in Bermuda; therefore we gratefully salute Clarien’s innovative approach to putting Bermudians into Bermudian homes.”

Craig Cannonier, Minister of Public Works, commented: “Home ownership, for some Bermudians, is something which may have seemed simply unobtainable previously. Now, thanks to this partnership between BHC and Clarien, owning one’s own home can be a dream realised for many.

“I am grateful to both parties for the amount of time and effort they put into coming to this arrangement and I can only imagine the joy this project will bring into the lives of so many who now have the chance to own a ‘piece of the rock’.”

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Comments (36)

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  1. So says:

    So Rodney Smith was right about100 % mortgages and other helping programmes. Will we thank him and then look at reversible mortgages
    Or continue to ignore him.

  2. Jus' Askin' says:

    U N R E A L :-(

  3. Bermie says:

    Considering 100% mortgage products are responsible for ongoing foreclosures and crippling Bermudians with unmanageable debt, how is this any different? (Genuine question as I’m not understanding how this is different or a good thing!)

    • Zevon says:

      Is anyone twisting their arms to take them? Genuine question.

      • wahoo says:

        The thing is that a 25-30% down payment demonstrates the ability to earn and also save money. A 100% mortgage could be trouble for someone who is not prepared for the reality of monthly payments. No bank or lender in Bermuda (or anywhere) wants to foreclose but sadly it is a reality. This group probably know more about it than I do so good luck.

    • White Cedar says:

      The only one that benefits is Clarion Bank with the 100% backing.

    • Denis P says:

      This is different because it isn’t a 100% mortgage product, it’s instead a far more creative scheme on the part of the bank (to which the buyers may still end up losing).

      ‘“BHC will guarantee the top 25% of each individual loan between 75% and 100% made by the Bank. Properties currently under the control of Clarien as well as select BHC-owned properties will be made available for purchase under the new initiative.”‘

      - It isn’t a 100% loan. BHC is theoretically taking on the down payment risk.
      - It is only applicable to properies that BHC sells or Clarien “conrols” (repossed homes of under water morgages”)
      - BHC shifts their inventory to buyers who take on the risk, loaning them effectively the equity in the properies they’re selling.
      - Clarien gets to shift underwater homes to new buyers without having to put them on the fair market

      All so we can sell to people who can’t manage to save for a down payment and ultimately may not be able to afford the homes as a result.

    • WarwickBoy says:

      It’s been less than a decade but how quickly we forget what precipitated the financial mess of 2007 and 2008. 100% mortgages were a prime ingredient.

      Offering mortgages to borrowers without requiring any down payment (which demonstrates the ability to manage and grow financial resources) is folly. Hopefully the lesson isn’t too painfully learned this time.

    • john says:

      whats the alternative for Bermudians who cant afford to put down $50k or 60k down payment but can manage to make the mortgage payments?

      • Toodle-oo says:

        There isn’t really any alternative . But they do need a certain little thing that doesn’t really exist any more.
        Ironclad job security .

    • Say Whaat? says:

      This is different because the customers will be able to make their mortgage payments. The only thing they don’t have $20 or $30k lying around to use as a down payment.

  4. Oh please says:

    I expect to see the OBAers out in full force objecting to this terrible idea…

    Oops sorry, this time it’s the oba proposing 100% financing..So it’s good now..

    Carry on…

  5. San George says:

    This is pure electioneering! Consider the sourcing bank. This bank and its owners are predators. Agree that 100% financing is what got us into this foreclosure cycle. Due to Bermuda law banks don’t pay a significant price for loose lending – there is no debt forgiveness in Bermuda. Buyer beware!

  6. Rhonda says:

    OBAers are out in full force objecting to this terrible thing.

    Oops, it’s the OBA so it’s okay now.

  7. Hummmm says:

    Keep renting it’s a trap

  8. wassup says:

    I don’t understand why this is being done, wasn’t this kind of easy lending the root of the sub-prime crisis?

    And this: “BHC will guarantee the top 25% of each individual loan between 75% and 100% made by the Bank. Properties currently under the control of Clarien as well as select BHC-owned properties will be made available for purchase under the new initiative.” concerns me.

    1. The BHC is a quango – ie effectively an arm of Govt with a budget from Govt. Does this mean, in effect, that if mortgages are defaulted the BHC (Govt) picks up the 25 percent tab? And the part about properties being under control of Clarien …. so they have been repossessed? In which case, this is a pretty sweet deal for the bank, no?

    • Say Whaat? says:

      I hear you but they are not getting million dollar housing here. That’s a big difference.

  9. Sara says:

    100% is a terrible idea. Why not meet in the middle and lower the down payment to sat 10% to make it more affordable?

  10. kam says:

    sounds like bull$hit to me lol gotta wonder what they not telling you. lol

    • jiggs bda says:

      I bought a home like that 20 years ago and was able to trade up after 7 years, so i have experienced the value of a financier believing in you and taking an unconventional approach.

      No BS and or hoops to jump through

  11. frank says:

    So does this mean that the codes at Grand Atlantic
    Will be back on the market

    • Say Whaat? says:

      I hope so! They should be. However an America’s Cup team is currently using the property. They (the OBAubp) don’t want poor people to have water front housing.

      • Jus' Wonderin' says:

        “They (the OBAubp) don’t want poor people to have water front housing.”

        you’re really a moron if you believe that…

      • Bully Beef says:

        You mean (disappearing) cliff-front housing?

  12. Vote for Me says:

    All that glitters is not gold.

    A more permanent assistance from Clarien would be to reduce the mortgage rates for all borrowers trying to purchase houses below a certain limit.

    We also have to ‘see the forest for the trees.’

  13. swing voter says:

    aaaaah don’t you love pending election dates? remember how paget west and warwick south was loaded up with government low cost housing to swing the voter base? PLP or OBA you both got some tricks! who do I choose, batman or robin?

  14. Imagine That says:

    Been asking BHC to do a Rent To Buy for 20 years!! Now that I am 56 will they sell to me ??? As people my age the bank doesn’t take a risk with.

  15. Vote for Me says:

    All that glitters is not gold.

    A more permanent assistance from Clarien would be to reduce the mortgage rates for all borrowers trying to purchase houses below a certain limit.

    We also have to ‘see the forest for the trees.’

  16. Watching anxiously, could be our answer says:

    I would love to be a part of this with my family but none of us area BHC members and we owned a condo previously and sold it and paid for our children to go off to college. We are a family of 5 and between all our rents that we pay, it amounts to just under $9,000 a month!!! so to be able to own a home again would be fantastic but the current down payments are unreachable if we want to live and appreciate life. Hopefully other banks offer this without the BHC stipulations.

    • Bully Beef says:

      You need to consult a financial planner. Paying nearly $100,000 a year on someone else’s place make no sense. Good luck because Bermuda rates are more than double UK (for example).

  17. Oh,I see now says:

    What happened?

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