News Column

NMRC - Only Four States Have Agreed to Develop Mortgage Law

July 14, 2014

Kunle Aderinokun

The Nigeria Mortgage Refinance Company (NMRC) has said only four of the 21 states of the Federation, which are the pilot states for the mortgage refinance scheme, have expressed interest in developing a mortgage law, that is expected to give fillip to housing finance in Nigeria. The states are Abia, Akwa Ibom , Enugu and Kogi.

Chief Executive Officer of NMRC, Mr. Sonnie Ayere, who disclosed this at the Uniform Underwriting Standards Workshop organised by the company noted that the mortgage refinance institution was in the process of drafting the law that is expected to be passed by all the states.

Stating that NMRC would not formulate the law in isolation of the states, Ayere expressed the need for all the states to come on board. But he added that besides passing the law, the corporation was planning to come out with a policy of implementation for the law to avoid interpretation of the law differently.

The policy of implementation, he explained, would give "some uniformity as to how the law is implemented across the different states that agree to implement it." The mortgage law, specifically foreclosure law, is one of the three pillars of housing finance in Nigeria. The others are finance and titling.

Ayere disclosed that over the last six months, the NMRC had been working on the enabling environment. He expressed the hope that : "Certainly, we should be able to hit our target of providing the first financing hopefully by the end of this year or say by the first quarter of next year at the latest," adding: "Again, there are so many moving parts and what we are trying to do is to make sure that when we hit the market, lets come to the market good and what we have is actually sustainable rather than coming half measured."

Ayere spoke along with Managing Partner, G. Elias and Co., Dr. Gbolahan Elias, who is leading a team of six law firms to work with the states on the mortgage law and Managing Director, Homebase Mortgage Limited, Mr. Femi Johnson, who also represents Mortgage Bankers Association of Nigeria (MBAN) on the board of NMRC.

Elias explained that it was the aim of the NMRC to have some uniformity in mortgage practice nationwide. According to him, "The reason for that is not hard to see. If you are going to have a pool of mortgages, that will form the underlying assets that the NMRC is going to raise money to use to buy some mortgages, there has to be some equality, otherwise, it becomes very difficult for the NMRC to price its financing."

Given this scenario, he noted that "with a view to achieving uniformity, one of the things that we are doing is having uniform underwriting standards, but beyond that we should have uniformity in the laws relating to mortgages nationwide." Elias pointed out that there are five challenges that affect uniformity of laws across the states. The challenges, according to him, include, land law in Nigeria being a state matter; perfecting mortgages takes a long time; high cost of mortgage perfection; difficulty in enforcing mortgages and non-availability of statutes.

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Source: AllAfrica

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