DUSTRY’S experts have called on the incoming government to give development of mortgage sector a priority.
According to them, government’s political will is extremely needed in the sector now than before, citing the example of the US’ President Biden, who approved $73 billion for affordable housing last month.
The experts noted that all states in the United States of America are also investing billions on affordable housing.
This, among other suggestions were made during the Central Bank of Nigeria Financial System Strategy (CBN FSS 2020) tagged, ‘Navigating current challenges in the Nigerian Mortgage market,” which was held virtually.
They experts siezed the occasion to identify some of the constraints to the development of the Nigerian mortgage industry and the necessary steps required to overcome the challenges.
The forum had experts such as the Executive Director, Housing Development Advocacy Network (HDAN), Mr Festus Adebayo; Managing Director, HomebaseMortgage Bank, Dr Femi Johnson;Managing Director, Federal Mortgage Bank of Nigeria (FMBN), MrMadu Hamman and Managing Director,
The experts itemised threats to mortgage system development to include cumbersome foreclosure procedures, Land Use Act 1978, poor land registries, weak capacity of Primary Mortgage Banks and domination of financial system by retail deposit banks, among others.
In their recommendations, the experts want the government to strengthen the FMBN, adding that all outstanding mortgage related stakeholders for speedy passage must follow up bills in the National Assembly.
The stakeholders also suggested the need for improved advocacy and setting up lobbying group to follow matters that will benefit housing development in Nigeria.
FMBN’s Managing Director/Chief Executive Officer, Madu Hamman, urged stakeholders to engage the Federal Government and institutional regulators towards creating special intervention funds and subsidies for the mortgage industry.
He identified high cost of borrowing in the sector as one of the biggest challenges facing the industry.
He decried low contribution to the National Housing Funds, saying the fund has not grown to the extent of addressing the housing crisis in the country.
According to him, there was a need to look outside the contributory fund to provide the cheapest source of funds for mortgage origination across the country.
Lamenting poor land registry’s administration in the country, Executive Director, Housing Development Advocacy Network (HDAN), Mr. Festus Adebayo, called the incoming government to substantially improve the registration process by reducing the time taken to achieve the necessary consents while reducing the costs from 20-30percent of the value of the property to nearest five percent.
According to him, the authority should remove the need for Governor’s consent for land transactions
Besides, he urged the government to introduce large scale land registration programmes and facilitate the acquisition of title by existing occupiers of property.
Adebayo wants the incoming government to either strengthen the National Housing Fund (NHF) or significantly reform it so as to redress the balance between contributors and borrowers
“The incoming government should substantially increase the capital requirements for primary mortgage institutions (PMIs) and make loans through the NHF only to those that meet this and other standards.
“Government must put FMBN on a stable footing and develop its facilitation role; reform the arrangement for foreclosure; and develop a mortgage insurance programme,” he said.
In addition, Adebayo called the government to introduce comprehensive building code and provide protection for buyers of houses during the course of construction
The Managing Director, of Homebase Mortgage Bank, Dr Femi Johnson, emphasised the need to de-risk the market and commoditise the mortgage sector for more Nigerians to have access to the mortgage.
Managing Director, Millard Fuller Housing Foundation, Sam Odia, called for adoption of new and innovative approaches to addressing mortgage sector’s challenges. He also urged that efforts should target solutions to the low-income masses in need of housing.
Earlier, while enumerating threats to the Nigerian mortgage system, the experts lamented the domination the financial system by retail deposit banks, saying this accounted for over 90 per cent of the assets of financial institutions.