In the just concluded stakeholders’ forum on Uniform Underwriting Standards Workshop, held in Lagos, NMRC is preparing to resume full operations in the next few weeks. The seminar was organised in conjunction with International Finance Corporation (IFC) implemented a Uniform Underwriting Standards Workshop with the Primary Lending Institutions (PLIs) and other stakeholders with a view to provide support for the housing finance for private sector in Nigeria.

The NMRC is a private sector driven company with the purpose of developing the primary and secondary mortgage markets by raising long-term funds from the capital markets as well as foreign markets, and provide accessible and affordable housing in the country.

The company was established in 2013 and launched by President Good luck Jonathan in January 2014, has technically commenced operations just as the company completed its two day workshop on uniform underwriting standards for mortgage loans in the country.

Speaking athe workshop, the Chief Executive Officer, NMRC, Mr. Sonnie Ayere stated that “When President Goodluck Jonathan launched the NMRC in January, he said the company will begin operations by mid year 2014 and I am glad to say that we have commenced work. The process of refinancing is not what you do suddenly. It takes several processes and we are on those processes and by the end of the year or early 2015, the company will officially issued its first mortgage refinancing and the whole world will see it.”

Speaking further he stated that the company has taken delivery of the first tranche of $20 million from the International Finance Corporation (IFC), an arm of the World bank, and has also raised N7 billion and N3 billion tier1 fund.

He said the company has technically resumed work and that the result of the work being done now will be feasible in the next six months when it will officially carry out its first mortgage refinancing.

As part of its criteria for mortgage refinancing, the Nigerian Mortgage Refinance Company has set 20 per cent as the minimum equity contribution by applicants for loans.

According to Ayere, the criteria will be the guidelines that a mortgage lender will have to meet to be eligible for loan, adding that for a property to be eligible for financing, it must have tenure of 20 years.

The NMRC is expected to engage with stakeholders on the key components of the model mortgage law, which is expected to eliminate the current challenges in titling, land administration, mortgage registration and enforcement, thereby improving standardisation.

According to Ayere, about 21 states have already indicated interest in working with the NMRC and attended the workshop and have begun discussions with Kogi, Abia , Enugu and Akwa-Ibom state governments,

He said the organisation would also look at other consumer-friendly approaches to mortgage lending such as insurance products.

“This is so that people can take insurance against their jobs and death so that in case someone dies, the insurance company can pay off the mortgage and give the house to the beneficiary; we are looking at ways to make it consumer-friendly, while trying to bring the cost to an economically viable level,” he said.

The Advisory Partner to the NMRC and the Principal Partner, G. Elias and Co., Dr. Gbolahan Elias, said the mortgage company was also working on the foreclosure law, adding that it was the aim of the company to have some uniformity in mortgage practice nationwide.

“If we are going to have a pool of mortgages, there has to be some guidelines, otherwise it becomes difficult to say what the rules are. We are at the process of drafting a model law to be drafted by the states,” he said.

Elias said one of the issues the uniform law hoped to achieve was the land law, which he said was a major challenge to mortgage lending.

He said, “Land law is a state matter not a federal matter; so, to achieve uniformity, you cannot change the law at the federal level.

“The Federal Government cannot impose laws on the states as regards this because each state in principle can have its own laws relating to land.

“So, the approach has to be to offer an incentive for all of the states to say we will not take mortgages on land in the states unless the states fulfil certain minimum criteria such as the cost and amount of time it takes to get a mortgage and to enforce it.

“Based on this, we are not enforcing a single law nationwide but we are going to suggest a set of minimum standards that a state must have for the residents to take advantage of what the NMRC has to offer. There’s a challenge of the amount of time it takes to process a mortgage in a state; the NMRC is hoping to address this, it should not take too long.

“If we have a situation where a mortgage application has to go through 27 desks for signature, for instance, it won’t be done in less than six weeks. The overall time spent on stamp duty, governors’ consent and all the other processes has to be reduced.”

On what the role of the Federal Mortgage Bank of Nigeria would be after the take-off of the NMRC, Ayere said there would no overlapping of duties from the two institutions.

He said, “The FMBN is being restructured to look at other parts of the market; they are coming up with things like rent-to-own product and the lower end of the market. I think the market for housing in Nigeria can accommodate two or more institutions of this nature; it is so big that once we get the right blend, the NMRC may not be able to cover the market.

“Majority of the market falls under affordable housing; so, there is no competition; we are all trying to make the market work.”

 

2014-07-14