Operators in the mortgage industry have identified absence of foreclosure laws and lack of proper land titling as major issues hindering mortgage financing for the average Nigerian.
To address these problems, operators are engaging governments at state and federal levels to institute foreclosure laws to allow them recover their loans.
The Group Head, Business Development, Infinity Trust Mortgage Bank, Mrs. Ngozi Chukwu confirmed this to The Nation.
She said the mortgage industry would be doing three times as much financing as the industry is doing at the moment if there were foreclosure laws.
To make this possible, members of the mortgage industry, she said, were engaging state governments to come up with these laws and at the federal level, and the that the industry has initiated talks with the authorities of the Federal Capital Territory (FCT) administration.
According to her, “as a positive outcome of the constructive advocacy with the state governments of the federation by stakeholders in the mortgage banking sub-sector which includes the Central Bank of Nigeria (CBN), through FSS 2020, Nigeria Mortgage Refinance Company (NMRC) and Mortgage Banking Association of Nigeria (MBAN), we already have a Model Mortgage Foreclosure Law (MMFL)’’.
“It has already been domesticated and passed into Law by the Houses of Assembly in at least six states of Kaduna, Lagos, Ogun, Edo, Ondo and Nasarawa. Concerted efforts are being made for same to be achieved through the Nigeria Governors’ Forum (NGF),” she added.
Because of the absence of these foreclosure laws, Chukwu said the industry has instituted very strict underwriting for mortgage, which in turn, makes it difficult to own a home.
According to her, the problem the sector has is the absence of foreclosure laws.
“So, you have a situation where people actually borrow from you to buy houses and they are not paying and there’s very little you can do apart from go to court and, then, you can be in court for 10 to 15 years trying to resolve the matter and the person is not paying you,” she further said.
In places where there are foreclosure laws she pointed out that such “laws clearly states that after a certain number of months, you are served demand notices and if you fail to pay, the bank is authorized to take over the house but in Nigeria that’s not the case”.
“You give out money and you know that if the person doesn’t pay, you have a recourse, you can easily get your money back, it encourages you to lend more so we are working on that” she said.
If the challenges of mortgage foreclosure laws and the issuance of proper land titles are implemented, Ngozi Chukwu noted that the mortgage industry in Nigeria “will do more and our contribution to the GDP will increase”.
“We are working with the state governors and the state governments and we are hoping that in the nearest future this problem of land titling will be taken care of” she said.
She lamented that “it has being terrible in Abuja since this administration, I am not sure C of O’s have been given as quickly as possible. Alot of people have applied and they are still waiting to get”.
On the lingering issue of housing deficit in Nigeria, Ngozi Chukwu believes the deficit will remain with the country for a while because “inflation has actually made building houses more difficult now”.
“Some few years ago you could buy a bag of cement for a thousand something now I understand it’s about five thousand plus so it’s becoming very difficult to have people actually build houses for sale”
“When they are able to build the cost is so high that the average citizen can not afford them even with a mortgage so yes the housing deficit is actually going to grow” she argued.
Speaking to the mortgage industry’s efforts to reduce the housing deficit, Chukwu said “there is very little we can do because the cost is not within our control we can’t control it, the only thing I know that government is doing or we are doing in consensus with government is actually to look at social housing and government is doing a lot in that regards”.