Significant amendments to the Registered Land Act have been passed to introduce greater fairness in the foreclosure process for homeowners and businesses facing repossession.
The changes were highlighted during the Radio Cayman programme ‘For the Record’ on 25 March by Red Bay MP Roy Tatum and opposition leader Joseph Hew.
A key amendment now requires lenders to obtain at least two independent market valuations of a property before it can be sold.
If there is a variance of 15% or more between the two valuations, a third independent valuation must be carried out.
Previously, the law did not strictly require current market valuations, often leaving borrowers without a reliable point of comparison.
The amendments also address what was described as a significant gap in the previous framework.
Lenders or finance institutions must now set out in writing all steps taken to work with the borrower to avoid foreclosure before they can take possession of the property or initiate court proceedings.
“If you get to a position where it does go to court, you now have in writing the full list of what transpired,” Tatum explained.
Tatum, who has a banking background, told host Orrett Connor that any employee of a financial institution found to be benefiting personally from a foreclosure through insider information would be committing conduct akin to insider trading and should face immediate dismissal.
He noted, however, that while he had heard anecdotal stories, he was not aware of any specific proven cases.
The amendments formed part of broader bipartisan cooperation during the recent sitting of parliament.
Opposition suggestions, including those from Tatum and other members, were accepted by the government to strengthen the legislation.
