Mortgages and why I hate Bermuda banks

I'm not surprised by the reveal that many Bermudians are having difficulty with mortgages of late, what with the economy still struggling and many people currently being jobless.

We've collectively put ourselves in this position, but it's the individual persons who are now in a position of trouble; the local banks wield all the power. It's only expected that individuals are now getting frustrated at feeling that there's little to no way out of a tight situation - instead several of us are now made to feel like we're mere commodities, barn animals or otherwise totally subservient to the banks.

Savings accounts? Minimal interest. Sometimes we have to *pay THEM* for the privilege of holding our money. Loans, on the other hand? Ha ha ha.

True story: when I was completely without income not too long ago, we approached our mortgage lender with the hope of renegotiating our terms. We were still in decent enough financial position where we weren't in default. However, with minimal savings at the time, we were looking to be able to spread out payments a bit more.

The bank's line was essentially that we ought to almost literally go into poverty before they'd consider. We felt belittled and insulted by their stance. I think they weren't going to budge unless we were literally eating nothing but Vienna sausages and could show that we were on the brink of default, before they said, 'hm we won't get anything from these suckers, may as well relent a little bit'.

I think this is partially why the Finance Minister indicated that he wanted to investigate the lending practices of local banks recently - although I don't have any expectation that these for-profit businesses would be at all interested in adjusting their policies (and why would they? Ownership is now overseas-based, and if they feel threatened, they can shift out at any time).

Basically, I feel that many of us are simply and irrevocably screwed.

1 comment:

Anonymous said...

100% agree.

I was in a similar situation. I only owe ~30% of the residence value and was told I wouldn't be able to go on interest-only until I had been in default several months. Because my mortgage was an automatic debit from my account I'd have to let my bank account go to zero for several months before going interest only.

Basically they wanted me to be starving before they'd negotiate.