Mortgagee Sales – from a Customers Perspective

A few months ago the Turama Programme on CITV and the Cook Islands Herald featured an article regarding Mortgagee Sales. Charles Little of the legal fraternity along with Jackson Enua of Westpac Bank and Brent Fisher from Cook Islands Realty Ltd gave some reasons as to why and how this problem had become a common occurrence within the Cook Islands over the past few years.
This article will address the same issue but from the customer’s perspective and from someone who has and still is personally going through the experience. It is my intention to highlight this problem in the hope that the major players in this saga – the government and banks endeavour to make this a top priority today and work together to find real and genuine solutions as we the Cook Islands people are tired of paying the astronomical interest rates on housing loans and losing our lands.
When I was researching I found that total lending in the country at 30 June 2009 was $305 million, of which BCI was lending out $33 million and the remaining bulk of the loans of about $272 million are held with Westpac and ANZ. BCI made a profit after tax of 3% of its loan portfolio, approximately $680,000. I was unable to find the after tax profit figures for the Westpac or ANZ.
Some solutions are:
Govt can -
regulate the banks to lower their interest rates and fees to levels that will provide them with reasonable but not super profits.
provide funds at a lower rate to lenders that can be on lent at a lower rate to be used for housing loans.
Govt and the banks can -
-support the setting up of a Citizens Advice Bureau to help educate people about their rights and responsibilities when borrowing from the banks. Having gone through this experience – I know this type of advice would be welcomed to assist the many people out there that are going through and those that will be going through the same trauma.
Banks can -
price their products based on world parity pricing – so they should be making a similar profit margin here as they are making in Sydney, London or New York.
more carefully consider how much their customers can afford to borrow and repay, and encourage customers to build their homes in affordable stages rather than borrowing huge sums all at once.

By Nana Short

Herald Issue 463 10 June
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