Newly-appointed Housing Development Corporation (HDC) chairman Noel Garcia says of the 13,265 homeowners and renters on the corporation’s database, only 192 have so far applied for a two-month deferral of payments towards their homes during the COVID-19 crisis.
The deferral of payments the HDC will have to undertake based on the current applications is still minuscule compared to the $45 million it is currently owed by its delinquent clients.
Garcia gave a breakdown of the figures during an interview with Guardian Media last week.
The HDC offered a two-month deferral/moratorium on payments for mortgage, rental, rent to own and license to occupy clients on its website on March 24, soon after Prime Minister Dr Keith Rowley announced a swath of measures to help citizens going through the harsh financial challenges some may now be experiencing due to the forced shutdown of business activity due to the COVID-19 pandemic.
The deferrals, so far only for March and April, were implemented by both the HDC and the T&T Mortgage Finance company, both agencies, after Rowley promised to bring financial relief to citizens on the lower end of the earning scale as the Government was forced to shut down non-essential businesses to avoid the spread of the contagious disease.
“Understand people, if you owe the money and you can pay, pay it! This should be a benefit only to those who cannot pay. If you could pay it (rent/ mortgage) now, pay it. It is for those who cannot pay we are trying to provide that relief,” Rowley said at a post-Cabinet media briefing detailing the measure last month.
Asked how many of HDC’s clients had since requested a payment deferral, Garcia said their records showed 192 clients emailed or dropped off letters at their Port-of-Spain office asking for the relief.
He said the deferral requests have been small when taking into account they had 13,265 clients in their database who are billed monthly.
Garcia could not, however, indicate how much the HDC would defer in payment from the 192 clients not paying. But he said that if a client has a ten-year mortgage and requested the two-month deferral, their repayment will now be over ten years and two months. Basically, he said it would seem the majority of their clients have opted not to have their payments extended given the country’s challenging situation.
“It is important to note that this is a deferral and not a waiver. Clients in rental and licence to occupy or other similar arrangements are expected to make their payments once their financial position has improved or when they are in a position to do so. This can be done in a lump sum or in partial payments,” Garcia told Guardian Media.
Asked if the deferral of payments would affect the HDC’s operations in any way, Garcia said, “The HDC relies on funds received from mortgages, rentals, license to occupy, mortgage conversions and sales of units to implement its aggressive housing construction programme.
“Therefore, the deferral may impact the timely completion of some of the HDC’s funded programmes and our ability to clear outstanding debts.”
Garcia said they also expect the clients who applied for the help to honour their financial obligations as well.
“While the HDC is sympathetic to persons who may have lost their jobs due to this crisis or are currently experiencing financial difficulties, the Government has implemented certain measures to assist citizens at this time.
“Therefore, the HDC expects that when our clients’ financial positions have improved they will honour their financial commitment or would have met with the HDC’s Recoveries Department to finalise a suitable payment plan,” he said.
Garcia pointed out that clients who are not in good standings or owe the HDC would not qualify for the deferral. He said 2,800 of its clients are currently listed as delinquent payers.
Asked how much the HDC is owed by delinquent clients, Garcia said as of February this year, the HDC is owed $45 million in rent.
“This amount represents balances outstanding on the HDC records for several years,” he said.
“The delinquency list varies, as arrears are sometimes cleared by customers and then new arrears are generated due to non-payment. The average is around 3,000 customers in any given month.”
Asked if the HDC’s arrears have been decreasing, Garcia said yes, noting that the delinquency tends to be seasonal and is highest around the Christmas and Carnival period.
“Customers who become delinquent often do so due to an inability to pay rather than an unwillingness,” he revealed.
With unemployment increasing during the pandemic, Garcia admitted there is a possibility that the HDC’s arrears may increase.
“However, if we use the request for deferrals as a guide the arrears amount may not increase greatly.”
In 2018, Garcia said the HDC set up a department specifically to recover payments owed by delinquent clients. HDC has also been publishing the names of clients who religiously dodge payments.
“A debt collection vehicle would also visit clients at their homes who claim ignorance of non-receipt of official correspondence, while the services of external debt collection agencies are also procured to corroborate the efforts by the HDC’s internal Recoveries Department.”
While the Government has also put a halt on all construction work deemed non-essential during the COVID response, Garcia said the HDC has not been “unduly impacted” by this move.
He said 41 contractors working on 18 housing projects across the country have been affected by the Stay-at-Home order.
Some of the projects that had to be halted were Eden Gardens, Mahogany Court, Real Spring, Cypress Hill, Lakeview and Harmony Hall.
However, he said the HDC has approximately 2,500 houses in advanced stages of completion. In the last 15 months, he said 1,450 families and individuals had been recipients of HDC homes.
Garcia said the HDC’s biggest challenge was still funding.
“Funding will always be a challenge, particularly for organisations like us whose mandate directly impacts the livelihood of citizens,” he said.
Like most entities, Garcia said the HDC will always be desirous of more funds to be able to assist a greater number of citizens. However, he said the HDC is cognisant of the country’s economic climate and competing needs at this time.
