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A new secondary mortgage market is being proposed in Jamaica, with the goal of breathing new financial vitality into the Caribbean nation’s residential property space.
According to a report in The Gleaner, Prime Minister Andrew Holness addressed an audience at a Realtors Association of Jamaica symposium with the outline of an institutional framework for a secondary mortgage market. Holness stated that the introduction of this framework would benefit potential homeowners, while attracting investors to a new lineup of mortgage-backed securities (MBS).
“We are now considering how to get more liquidity into the mortgage market so that mortgage rates can come down even further,” he said. “We are looking very closely at policy analysis towards developing a secondary-mortgage market. That will ultimately have the effect of bringing down mortgage rates.”
Holness noted the housing-fueled 2008 financial crisis in the U.S., adding that it would serve as a reminder that any new secondary market would need to be designed to avoid a reprise of that fiasco. "There are several protection models that have been developed for secondary markets, so we are looking at those very carefully," Holness said.
Holness also proposed introducing reverse mortgages to Jamaica as a vehicle to enable older homeowners to convert their home equity into cash.