President Goodluck Jonathan on January 16 launched the mortgage refinancing scheme. What new things can this bring in the real sector? Government through the Ministry of Finance signed a $300million loan from the World Bank to jump start secondary mortgage market with the establishment of the Mortgage Refinance Company (MRC). The MRC is to provide the long term liquidity, the primary mortgage companies need at affordable single digit rates. Experts in the real estate sector have been calling for the establishment of an efficient mortgage securitization market where mortgage backed security bonds are traded to raise long term affordable funds for mortgages. President Goodluck Jonathan formally launched NMRC saying it is a public-private partnership arrangement initiated in 2012 to bridge the funding cost of residential mortgages and promote the availability and affordability of good housing to working Nigerians. It is a component of the housing finance programme of the Ministry of Finance in collaboration with the Central Bank of Nigeria , the Housing Ministry and the World Bank . Launching the scheme with the attendance of major stakeholders in the housing industry at the Banquet Hall of the Presidential Villa Jonathan called for reduction of land registration cost as well as computerisation of land registry in the country. According to the president, computerisation of land registry will ease land administration. How stakeholders see it Paul Onuoha , a senior civil servant said: "The newly launched mortgage refinance company is for more Nigerians to access mortgage facilities to be able to pay for their houses. "The reality on ground is that mortgage finances are difficult to obtain because the mortgage institutions themselves are not properly funded or for other reasons. Very few are able to obtain mortgage facilities for their houses. "It's hoped that when this becomes operational, more money will be injected into the mortgage system. It's the theory of economics that when you inject much into a system, the price falls and more people benefit. "With more money injected into the mortgage system, the interest rate will fall and it will become easier for people to service their mortgage obligations and the number too will increase. "He explained that, adding the concept is to revitalize the mortgage institutions even in the advanced countries, it's the mortgage institutions that propel the housing sector. It's only in Nigeria that somebody brings out N100 million cash to pay for a house. "It's a multi-sectoral thing. The ministry of finance has its role to play, the central bank has its role to play, the ministry of Lands, Housing and Urban Development has its role to play, the primary mortgage institutions who may be the disburses of these funds also have their role to play and the individuals who are the beneficiaries of this mortgage scheme also have their roles to play. If everybody plays their roles, I think everything will work properly," he added. Mr Alex Daniels who is Principal Partner, Avila Consort LTD , Project Monitoring Consultant said: "I see it as a parallel agency to the Federal Mortgage Bank doing the same function. "I'll prefer that FMBN be strengthened with that money so that it will be able to perform effectively in the area of house delivery. The money spent in floating a new agency should be injected into the existing one. It will make it stronger and it will make it to deliver optimally. "If you look at the project, it's very beautiful, financed by FMBN and was delivered within record time. Strengthen FMBN rather than duplicate functions. FMBN can do more with its experience if such money is channeled to it." Olawale Ahmed , real estate consultant: "I'm happy about the scheme. The good thing about it is that you have all the major stakeholders in the mortgage finance as equity partners - from the IFC, Ministry of Finance , primary mortgage companies and banks."
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