In the quest to find sustainable solutions to long-term funding for the mortgage sub-sector, the Federal Government and Mortgage Banking Association (MBAN) have moved to take the bull by the horns by exploring alternative sources to finance affordable housing in the country.
To drive the process, the Minister of Housing and Urban Development, Ahmed Dangiwa, MBAN President, Ebilate Mac-Yoroki and Chief Executive Officer, Nigerian Exchange Limited (NGX), Temi Popoola, met in Abuja to weigh the options for innovative approaches to access housing finance from the capital market towards addressing both the supply and demand side of the housing system.
They stressed the need to significantly grow the contribution of the entire mortgage banking and housing finance sector to the nation’s Gross Domestic Product (GDP), which was put at 0.38 per cent, compared to other countries such as South Africa and Malaysia with an average rate of 40 per cent.
They discussed potential avenues such as securitised crowd funding on the NGX platform to unlock developer financing for viable housing projects on the supply side. The parties also considered convertible bonds and insurance agencies to cater to the demand side.
“We aim to continue these discussions towards zeroing on the most effective frameworks and mechanisms to deploy and promote with the involvement of all relevant stakeholders including the Pension Commission,” Dangiwa said.
The foundation for the meeting was laid at the just concluded 20th edition of mortgage banking sub-sector yearly Chief Executive Officers (CEOs) retreat organised by MBAN in Abuja recently, themed “Advancing Sustainable and Affordable Housing Finance in Nigeria: Navigating Macro-Economic, Legislative and Policy Frontiers.”
At the forum, the minister charged the CEOs to find creative ways to develop innovative mortgage products that are responsive to the current state of Nigeria’s economic situation such as adopting rent to own mortgage options, flexible monthly mortgage loan repayments to make commercial loans more affordable.
Dangiwa also expressed concern that the capital market has not been maximally tapped to raise long-term funds to refinance mortgage loans and to explore more creative ways to make mortgages more affordable even as government work to fix the larger macro-economic problems.
“As leaders, we must not only see provision of housing and home loans from a business and profit motive, but also see expanding access to affordable mortgages as a moral imperative. So, we must ensure that not only the elites, but Nigerians within the low- and medium-income segments have access to affordable mortgages,” he added.
Mac-Yoroki called for the creation of special courts such as Investment and Security Tribunal (IST) in all the states of the federation to handle all mortgage and housing related matters as is being done currently in Lagos State.
He also expressed urgent need for amendment to all laws that would facilitate progress in the mortgage banking sub-sector, as well as real estate such as draft bills and review of the laws that are having effects on housing and housing finance that had been pending with the national assembly for amendment, which includes Land use Act 1978, National housing Fund (NHF) Scheme Act 1992 and Federal Mortgage Bank of Nigeria (1993).
It includes Federal Housing Authority Act (1990), Foreclosure law bills- Residential Mortgage Act and Residential Mortgages (incentives) Act, mandate to the state housing corporations to develop new geographical areas in their states of operation and government at the three tiers should facilitate automation and eventual integration of all records and processes in the local, state and federal government land registries.
The introduction of a new framework to strengthen property/security right by Land Use Act 1978, removal of the requirement for governor’s consent on land transaction from the Land Use Act 1978 and removal of the arrangements for foreclosure proceedings on real estate transactions from the general and common law provisions.
MBAN president stated the critical need for the state governments to address foreclosure issues by enacting the model mortgage and foreclosure law (MMFL), as well as establishment of the mortgage and foreclosure authorities to regulate mortgages, foreclosure and enforcement of real property and connected purposes.
Besides, it canvassed creation of a housing commission or committee, which should meet quarterly to review housing matters, consisting of the Federal Ministry of Housing, Federal Mortgage Bank of Nigeria (FMBN), Federal Housing Authority (FHA), Family Homes Funds limited (FHFL), Senate House Committee, Nigeria Mortgage Refinance Company Plc (NMRC), Shelter Afrique, MBAN, Real Estate Developers Association (REDAN), Central Bank of Nigeria (CBN), Federal Ministry of Finance/Incorporated (MOFI) and Pension Commission (PENCOM).
The mortgage operators advocated a central housing database so that all housing stocks created by FMBN, FHA, FHFL and Federal Ministry of Housing and Urban Development (FMHUD), shelter Afrique and all developers should be captured under one record.
He further made a case for an appropriate law that will recognise electronic print-outs of title documents as prima-facie evidence for house ownership through the Central Security Clearing System (CSCS) to facilitate trading (buying and selling) of mortgages to be done electronically.
According to Mac-Yoroki, “All certificates of occupancy and deed of assignment as currently held are all death assets without commercial value because they cannot be easily traded.”
Source: The Guardian
