St James North Member of Parliament Edmund Hinkson has called on Cabinet to advance the requests for the introduction of reverse mortgages to the local financial market.
The attorney-at-law told the House of Assembly on Tuesday that there are many older Barbadians who are asset-rich but cash poor, and could make good use of this financial option to take care of themselves as they age.
A reverse mortgage is a home loan that the homeowner is not required to repay for as long as they live in the house. It can be paid in a lump sum, as a monthly income. The loan and interest are repaid to the financial institution when the house is sold or the homeowner dies. Reverse mortgages are becoming popular in industrialised markets as citizens are living longer and want to use their assets to enjoy a better quality of life.
During debate on the 2023-2024 National Policy on Ageing, Hinkson said a proposal for reverse mortgages was in the Barbados Labour Party Manifesto of 2018, and he wanted the administration to revisit it.
“We’ve been talking for years about bringing in a legislative regime to accommodate reverse mortgages,” Hinkson said.
“We know that there’s a cadre of people in this country who are perhaps recognised to be middle-income in terms of their economic class but quite honestly, they might be asset comfortable because they have their own homes which are no longer mortgaged but they might be cash poor.
“Because their pension may not be as sufficient in some cases to sustain the previous life that they had when they were working, the issue of them being able to mortgage the equity in their home to get cash comes into play. I really believe that that’s something that this administration needs to look at seriously,” he insisted.
Hinkson also drew attention to the financial abuse of the elderly, particularly when their mental and physical capacity decline.
“This issue of abuse of our elderly persons by their younger relatives needs a legislative regime. I know it is difficult to have to legislate on everything but . . . trying to rob your elderly relative now out of money you know that they worked hard for and that you didn’t work for, quite honestly, is totally immoral and should be subject to criminal penalties.”
(IMC1)
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