A FORMER United Bermuda Party Parliamentary candidate has accused the Bermuda Housing Corporation of discriminting against him because of his political beliefs after threatening to foreclose on his mortgage on a $2 million property because BHC-selected tenants were $40,000 in arrears on rent.

Kallid Wassi was threatened with foreclosure - in spite of the fact that he and BHC chairman Raymonde Dill had mapped out a scheme for repaying the mortgage on his Pembroke property just two weeks prior - after he made negative comments about the island's political state on a radio talk show.

"I approached Raymonde Dill about the change in attitude and whether it was because he thought I was getting favourable treatment before, because of my affiliation with the UBP. He confirmed that this was their attitude and then brought up the question of the $40,000 in arrears.

"The issue here, is that they had in their hands, a property valuation from an independent surveyor. Bermuda Realty gave a value, at worst case scenario, of $1.9 to $2.5 million and these were conservative values.

"They had a debt in and around $1 million on my property - 10 houses and one commercial building. They were more than secure. By their own accounts, they had showed since 1996 a steady improvement of performance on the property. My own personal circumstances were better; the laundry was operating and I had the dry cleaning business. I had just had $30,000 to $40,000 cash infused into the property and they decided that was the appropriate time to foreclose."

Mr. Wassi said that his mortgage payments were restructured in 1996 after he found himself in deep financial trouble.

"It was agreed that we would be able to see through this financial issue if all of my creditors set down that, by allowing my assets - chief of which were my houses and a laundromat - to survive, all my creditors could be paid off. The BHC, my mortgators, were my primary support in this arrangement. They were the ones who called the accountants together to manage my funds.

"Things were going well until 1999, at which time Raymonde Dill took over the management of the BHC. Under the previous administration, they were to rent the property and receive all the rents.

"Immediately after Raymonde Dill took office, there was a shift in the BHC's attitude with me and in effect, they walked away from the plan that had been worked out. So I personally fixed the property and did all the upgrades. I spent my own money, got appraisals and raised the rent."

Mr. Wassi said that he explained to Mr. Dill that since it was the BHC that selected the tenants and had allowed them to fall behind in the rent payments which would have been placed against his mortgage, the BHC should shoulder some of the responsibility for the $40,000.

"After many heated debates, Mr. Dill finally agreed to roll the money into a new debt and gave me an offer letter. The difference was, that he changed the payment scheme from 17 to 15 years - which meant there was less money falling off the top and that was that money that my other creditors were going to be paid with. Two of my creditors met with him and discussed a payment holiday to extinguish all small creditors. Everything was positive and so I had another accounting firm produce a whole new plan to which all the creditors agreed.

"In the meantime, I went on the Shirley Dill talk show on VSB radio. I talked my normal stuff, which usually hits both (political parties) fairly evenly. Essentially what I said, was that neither party was capable of taking the country to a place where the people wanted to go because of all the racial baggage.

"A couple of weeks later, a bailiff approached me with a letter from the BHC lawyers saying that they were foreclosing on my property because of my inability to pay the $40,000 in arrears. So they did a complete U-turn for no other apparent reason. My view is that maybe the public could make a guess, given the facts, as to whether it was a business of professionalism - saving the taxpayers' money - or whether it was pure political discrimination. That's why I'm giving this information to the public."

Mr. Wassi - who pointed out he was a one-time Progressive Labour Party member before switching political affiliation - was handed official notice of BHC's intent to foreclose and in reply, pointed out through his lawyers that he had been in arrears of over $100,000 but had reduced that to $40,000 and that he had approached the BHC before spending $30,000 on upgrades to his property and this plan met with no objection despite the fact that that same cash could have been used to further reduce the arrears.

Frustrated, he made appeals to Housing Minister Nelson Bascome, to BHC then-vice chairman, Wentworth Christopher, former BHC chairman, Larry Burchall and finally, his Member of Parliament, Stanley Morton.

"I spoke to all of them. I explained that when I borrowed money from the BHC, they only financed me 60 to 65 percent of the entire value of the property; that I had to put in the rest of the money. The agreement was made with the condition that they would put their tenants in there but their tenants payments were so poor, they actually caused my debt to spiral.

"The rent to mortgage ratio was very close and as a result, my mortgage grew instead of shrinking and so in the early part of the 1990's they rewrote my mortgage. It was after that, what the Government did in recognition of cases like mine, was to introduce the private sector rental arrangement so that landlords like myself were not exposed to risk and didn't end up inheriting debt.

"I sent this information to Larry Burchall and to Wentworth Christopher becuase they were thinking that my mortgage was rolled over. I wanted them to see that they had an obligation to do it; that it was a moral issue. I explained this all to them but they continued to push the issue.

"The best argument they could give me was, well, Larry Burchall said that the BHC had been unethical and that this is what was done with supporters. He said that, in the past, the BHC had rolled over mortgages that should have been in default at the taxpayers expense and that was why they were foreclosing the mortgage. I pointed out that it was the year 2000; that the mortgage was performing. The property, at the very minimum, is worth twice the value of the mortgage. You have your tenants in there and you want to go back and punish me now for what you think should have happened four years ago.

"I said to Nelson Bascome that if the issue was the $40,000 in arrears, shouldn't you consider that because it was your tenants that generated the arrears, you have some responsibility? Why not approach me with a schedule? He said he would see what he could do, but he didn't do anything. He said he was going to find out if the staff were doing anything but this wasn't the staff. It was from the managing director on up. The decision had to have been handed down to the managing director because he was obviously doing a flip-flop. I called him back and he said, 'I hear you have two houses in the back, why don't you sell those to the BHC'? Raymonde Dill also suggested I sell the houses but I said it's one estate and there's the issue of parking, control, and subdivision so I refused.

"I thought that as an MP in my area, Stanley Morton might have a touch of morality and use his good sense to make them be sensible. He said he would check into it. I spoke with Wentworth Christopher, and he didn't seem to care much.

"What they would have done was take a property worth $2.5 million with a note of about $1million. Their balance sheet would automatically give them a $1million to 1.5 million value if through misappropriation or anything else, it wouldn't show on the balance sheet because they would've stolen from people like me to effect an equitable balance sheet. That's what makes the whole (story about the BHC in last week's Mid-Ocean News) scary. I don't know how many other people they've done this to but I would like to see Auditor General Larry Dennis look at what they did in my case."

In order to resolve the matter, Mr. Wassi paid the $40,000 plus an additional $18,000 incurred by interest, insurance and tax. In addition, he was handed a bill of nearly $100,000 for the professional help necessary for him to arrange repayment schemes that were satisfactory to his secured and unsecured creditors including the BHC.

"And then there was collatoral damage as my son, who I was about to sent to university, I couldn't afford to send him as I had to use all my funds to pay off the BHC.

"I went to the Human Rights Commission (HRC) after the issue and was bounced from person to person until it was finally recommended that there was sufficient information to warrant an investigation for political discrimination. It went into motion but then, 75 percent of the members of the HRC were removed along with Dr. Eva Hodgson who was one of the people on the committee who recommended that my case go forward.

"She, along with other known activists for rights and justice were no longer on the committee. The new members of the HRC board were people the Premier took the time to get the board positions filled with. They were, in her own words, 'members who are loyal to the party'."

When contacted by the Mid-Ocean News, Mr. Burchall said that Mr. Wassi's political affiliations had nothing to do with the BHC's decision to foreclose.

"That's his version," he said. "In 1999 when I moved into the position (of BHC chairman), Kallid Wassi was one of the problems I dealt with. Mr. Wassi had taken out a mortgage with the BHC 13 or 14 years prior. The key thing was the length of time. When the mortgage was brought to my attention, it had not reduced. It had increased. Thirteen or 14 years later, when the principle ought to have been down in the 10 percent band, it was still at 100 percent. Over that period of time, the mortgage, the principle, never reduced in any substantial amount.

"(As for the rest of his comments) those are his feelings. When I took over the BHC in 1999, some things were working properly and some were not working properly. I looked at a mortgage that had been a problem and had to be resolved. Mr. Wassi is being very liberal with his memory. He borrowed a $1 million in 1986 with the agreement it would be paid off in 15 years, and 14 years later, Mr. Wassi still owed the $1 million. After a situation (like that) you're going to have someone who's unhappy. Mr. Wassi is still unhappy but he has his opinions and he's perfectly free to air them."