The Nation Newspaper

Tag: mortgage

  • Mortgage critical to housing delivery

    Mortgage critical to housing delivery

    • By ESV Adewale Michael Adedeji

    Sir: Housing sector plays a very key role in a country’s system. As a matter of fact, housing affects directly the performance of other sectors of the economy, and impact directly and positively on productivity. Housing is a basic need of man, and more than any other item, housing impacts the well-being of the citizenry. For this reason, adequate housing provision have always engaged the attention governments, either in the developed or developing climes.

    The health of the workers, his well-being, and growth are tied to decent housing. Not only that; housing is one of the indices for measuring the standard of living of people. That is why governments in the developed nations designed programmes of assistance to enhance housing provision and delivery.

    Prominent in the list of the programmes includes provision of infrastructure and finance. More emphasis is put on finance, because housing provision requires huge capital outlay, which is often beyond the capacity of the medium income/low-income groups.

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    Mortgage plays a pivotal role in the development of housing markets. It is critical to providing affordable and decent accommodation.  Governments in the countries of Europe and America have since addressed this issue, and have put in place structures which ensure efficient and sustainable credit delivery to the housing sector. There are concerns that provision of affordable housing might be a mirage in Nigeria if the mortgage industry is not strengthened to finance home ownership.

    As a matter of fact, one of the major challenges to housing provision in Nigeria is the absence of well-established and effective mortgage administration, and until this challenge is resolved, the question of housing would remain begging for answer.

    Going forward, there is the overall need to maintain the macro-economic variables via disciplined fiscal and monetary policies for stable growth and low inflation to support low interest rates. Direct interventionist policy, to promote liquidity of the mortgage industry at single digit interest rates via the Nigeria Mortgage Refinance Corporation (NMRC) and Family Home Fund (FHF) is the way to go.

    Key to that is that the private sector via mortgage banks retain the role of underwriting mortgages directly and will boost effective demand for homes, which I think is far lower than the often-touted 28 million housing shortfalls. It is important to state again that the core focus of government should be on how to control inflation in the long run, to allow for single digit interest rates, rather than just intervention policies.

    Above all, government and the private sector should jointly drive the mortgage system. 

    •ESV Adewale Michael Adedeji,

    Lagos 

  • Mortgage bank gets new chairman

    Mortgage bank gets new chairman

    The Board of Directors of Abbey Mortgage Bank Plc has announced the appointment of High Chief Samuel Oni as the new Chairman and the retirement of Mazi Emmanuel Kanu Ivi and Air Vice-Marshal Olufemi Soewu (rtd).

    Mazi Ivi, a member of the Board, will officially retire on December 31.

    He has been an integral part of Abbey for the past 30 years, first as a Director and later as the Chairman.

    The Board expressed its deepest appreciation for his unparalleled and exemplary leadership, which played a pivotal role in the bank’s success.

    High Chief Oni was appointed as the new chairman effective January 1.

    A distinguished Fellow of the Institute of Chartered Accountants of Nigeria and the Association of Certified and Chartered Accountants London, he brings extensive experience to the role.

    His career included roles such as Director of Other Financial Institutions Department, Internal Audit, and Bank Examination at the Central Bank of Nigeria. He had also served as a Director of United Bank for Africa Plc and Chairman of UBA Capital, London.

    In addition to the retirement of Mazi Ivi, the board announced the retirement of Air Vice-Marshal Olufemi Soewu (rtd) with effect from December 31.

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    The board expressed its gratitude for  Soewu’s 18 years of unbroken and meritorious service to Abbey Mortgage Bank.

    Abbey Mortgage Bank had thrived as a trailblazing institution under the leadership of Mazi Emmanuel Kanu Ivi and Air Vice-Marshal Olufemi Soewu (rtd). Through highs and lows, the bank experienced transformation and success under their guidance.

    The retirement of both Mazi Ivi and Air Vice-Marshal Soewu (rtd) was marked by a lovely valedictory dinner held on December 14, 2023. The event was attended by the families of the outgoing members, and member of the Managing Committee of the bank. During his speech at the Valedictory Dinner, Managing Director Mobolaji Adewumi expressed his heartfelt appreciation, stating, “From my heart, sincere thanks to Mazi Emmanuel Kanu Ivi and Air Vice-Marshal Olufemi Soewu (rtd) for their invaluable support. Mazi’s handling of challenges has been truly impressive. Their dedication has left a lasting mark on Abbey Mortgage Bank. We draw inspiration from their leadership.”

    The Board looks back at a successful era and is confident that the wealth of experience and leadership qualities of High Chief Samuel Oni will contribute to the continued growth and success of Abbey Mortgage Bank.

  • Mortgage body seeks better frame work for land acquisition, others

    Mortgage body seeks better frame work for land acquisition, others

    The Mortgage Banking Association of Nigeria (MBAN) has called on the Federal and state Governments to alleviate the cumbersome legal and legislative framework for land acquisition in the country. 

    The President, Ebilate Mac-Yoroki, made the call when the MBAN team visited Chairman of the House of Representatives Committee on Housing and Habitat, Aminu Balele, to discuss housing agenda for Nigerians.

    The meeting was to discuss critical issues as panacea for affordable housing infrastructure development under the Renewed Hope Agenda of President Bola Tinubu.

    The call was also part of recommendations presented to Balele, which urged the National Council on Lands, Housing and Urban Development to prevail on the governments to adopt the MBAN Formula (1:3:1) as recipe for land registration, titling and title transfer.

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    This, he said entails reduction in the cost of Title Transfer to a maximum of one per cent of the property value, time to a maximum of three days and the procedures reduced/limited to only one desk (1:3:1).

    The formula, Mac-Yoroki noted, would alleviate the cumbersome legal and legislative frameworks for land acquisition. According to him, the existence of a cumbersome process of title documentation on land ownership, reinforced by an inadequate cadastral system, makes mortgage financing very difficult. 

    Mac-Yoroki also recommended the passage of the Model Mortgage Foreclosure Law (MMFL). This, he said, will move the sub-sector in the right direction. 

    Balele, who assured the association of support, said the committee is committed to improving the lives of Nigerians through affordable housing.

  • Nigeria Mortgage Refinance Company lists N11b bond

    The Nigeria Mortgage Refinance Company (NMRC) has listed its N11 billion 13.80 per cent Series 2 Fixed Rate Bonds on the Nigerian Stock Exchange (NSE), paving the way for bondholders to trade on their investments.

    The N11 billion bond was part of NMRC’s N440 billion Medium Term Note Programme. NMRC had launched a high-stake capital raising plan to support its mandate.

    The NMRC is a private sector-driven mortgage refinancing company with the purpose of promoting home ownership for Nigerians while deepening the primary and secondary mortgage markets. Most of its shareholders are corporate institutions.

    NMRC was incorporated on June 24, 2013 and obtained its final operating license from the Central Bank of Nigeria on February 18, 2015. In July 2015, NMRC successfully issued a 15-year N8 billion Series 1 Bond under its then N140 billion medium term note programme, backed by an unconditional Federal Government of Nigeria guarantee.

    NMRC is listed on the NASD OTC Securities Exchange, the over-the-counter platform for trading in shares that are not listed on the Nigerian Stock Exchange (NSE).

    Head, Shared Services Division, Nigerian Stock Exchange (NSE), Mr. Bola Adeeko commended the NMRC for listing the bond on the NSE, assuring that the Exchange would support the company in the realisation of its mandate.

  • ‘Mortgage market records 82 per cent growth’

    The mortgage finance  market recorded 82 per cent growth between 2010 and 2016, the Mortgage Banking Association of Nigeria (MBAN) President, Mr. Akinniyi Akinlusi, has said.

    He made this known  during a chat with The Nation. Akinlusi said while the size of the mortgage market in 2010 was N284.1billion, it grew to N348.1 billion in 2012, and by 2016, hit N518.76 billion, about 82 percent growth.

    The MBAN chief noted that mortgage transactions,  though low, were gradually picking up. He based this on the fact that in  39 years,  from 1960 and 2009, mortgage transactions were less than 100,000, compared to the 181,519 deals recorded six years – between 2010-2016.

    “We had less than 100, 000 mortgage transactions for 39 years; and in just six years, we had 181, 519 mortgage transactions. This is a significant growth that tells you that this industry is moving now and it is upbeat,” Akinlusi said.

    He explained that from microeconomics, mortgage debt to gross domestic product (GDP) is less than one per cent, adding that less than five per cent of the 13.7million housing units  were financed with mortgages.

    He blamed this low figure on the challenges in the industry, such as titling. The dearth of titled properties, he further explained, is an albatross for mortgages.

    “Mortgages are not created in vacuum. So there must be titles. If there are no titles for the land there cannot be title for the house on it. So, it affects both the supply and demand sides of the housing market,” Akinlusi said.

    He listed the problem of foreclosure as a challenge for the industry, adding that where there is a default in mortgage payment, recovery of same becomes difficult because of the cumbersome court process.

    Akinlusi also blamed the tenor period for mortgages as a hinderance for its steady growth.

    “Mortgage business is a marathon and not a 100- meter dash. There are mortgages with duration of 20 years whereas the funds available in the market are short-term funds. So, we cannot be using funds of 30 or 90 days for mortgages. This will be a recipe for disaster,” he explained.

    The MPR rate, which he said, is 14 percent makes the  market interest rate to hover around 20 and 24 percent, meaning that apart from the Federal Mortgage Bank of Nigeria, whose interest is at six percent, others are double digits and this affects mortgage affordability.

  • ‘Mortgage critical to realistic housing policy’

    ‘Mortgage critical to realistic housing policy’

    Nigeria’s mortgage system currently cannot support a housing policy that will deliver affordable houses to Nigerians. This was the submission of a speaker at the recently concluded 2017 National Built Environment Conference (NABECON), which held at the Ahmadu Bello University, Zaria, Kaduna State. The theme of the conference was Positioning the Construction Industry in Nigeria for National Economic Growth.

    While delivering his lecture titled Housing for all Nigerians: The Big Vision Test, at the conference, the Managing Partner, Costec Consultants, Mr. John Agele Alufohai, making reference to researches conducted by the Federal Mortgage Bank of Nigeria (FMBN), noted that high mortgage rates, which is usually given at short tenures; a difficult business environment, high inflation, and unstable policies, all combine to hampered the growth of the housing sector in the country. This, he further explained, is why there is an estimated deficit of 18 million housing units in the country. The research also revealed that the country needs to build 720, 000 housing units per annum at an annual cost of N56 trillion to bridge this gap.

    Explaining the link between what he called a “transformational” housing policy and the economy, Alufohai noted that a housing policy that works for all Nigerians – the rich, the poor, civil servants, small business people, artisans, informal sector workers and entrepreneurs, young graduates, young people with limited formal education, banks, construction companies etc. – will boost construction activities and make a significant contribution to economic development.

    He, therefore, suggested that the country should adopt the mortgage system of other countries that have delivered housing for both the rich and poor.

    “The most efficient focus of housing policy is for the government to assist millions of Nigerians obtain lower-interest mortgages; this is how most citizens are helped to acquire houses in many countries with successful housing policy such as Singapore, South Africa and Malaysia,”  Alufohai argued.

    Alufohai, a former president of the Nigeria Institute of Quantity Surveyors (NIQS) also noted that because a house is the single biggest investment for an overwhelming majority of people, an efficient mortgage system is critical to providing accommodation for most Nigerians. He revealed that less than three percent of Nigerians acquire their homes through mortgages, just as many others invest in building houses of different costs and quality without any help whatsoever from the government.

    He, therefore, proposed a modeling of Nigeria’s mortgage system after that of Singapore, whose citizens obtain 20 to 30-year low interest mortgages through a pool of funds into which all workers must contribute 20 percent of their salary to acquire houses

    Said he: “The clear solution to me is the Singapore model – creating a pool of funds into which everybody contributes monthly and from which everybody borrows to buy a flat or house. The Federal Government ‘tops up’ contributions into this remodeled National Housing Fund (NHF) with at least N10 billion every year and it’s perfectly alright if it spends every kobo on its intervention in housing on this”.

    Singapore, he further revealed, was once a once poor island in Southeast Asia, which evolved from a third to first world economy between 1965 (when it gained independence from the British) and 2000. Under Lee Kuan Yew, the country’s first Prime Minister, the government transformed huge swathes of urban sprawls and slums into well-planned cities that spurred economic dynamism and growth.

    He said although the country’s NHF attempted the Singapore model, but it failed. “One of the key reasons for the failure is contributors couldn’t access the loans because they couldn’t afford the deposit for the houses,” said Alufohai, adding that the NHF also failed because of the high interest rates charged on mortgage loans. He noted that a non-inflationary fiscal policy, flexible, sustainable exchange rates and hence, low interest rates are important to attaining a mortgage system that will also attract foreign investment into mortgage market.

    On the role of government in the remodeled system he said, “it could provide a subsidy on the interest on mortgage loans by investing or contributing funds into this pool of ‘forced savings’ – this would have been an excellent use of the petrol subsidy.”

    The chairman of the organising committee, Prof Ikem Mbamali, said the conference brought together scholars, industry professionals/practitioners and senior public service officials/administrators, exploring current developments and advances in the re-organisation of the construction industry for effective contribution to national economic growth.

  • Fed govt partners Academy on mortgage, real estate

    To boost mortgage and real estate business in the country, Mortgage and Real Estate Academy (MOREAcademy), in partnership with Centre for Management Development (CMD), a parastatal of the federal government, has concluded plans to hold Mortgage Industry Stakeholders Luncheon on September 19, 2017.

    Its Chairman  and  Western Atlantic Corporations Managing Director, Prince Ade Akinfolurin, made this know during the week in Lagos. According to him, the luncheon is meant to coincide with the historical outing of MOREACADEMY, an establishment of the Federal government in public-private-partnership (PPP) with Western Atlantic Corporation Limited.

    “The luncheon will flag-off the entire training programme of the Academy, and also secure the interest of the participating public in the development of the nation’s mortgage and real estate industry,” said Akinfolurin,  adding that it is meant to further instil public confidence in President Muhammadu Buhari’’s Administration that through MOREACADEMY, a new horizon in delivery of the much needed human capacity in the mortgage and real estate industry could be achieved.

    It is also expected to buttress the importance of MOREACADEMY and its trainings for the nation’s economic interest, taking into consideration the Federal Government’s mandate to various stakeholders in the discharge of their responsibilities. Most  importantly, Akinfolurin said it is a demonstration of the fact that  government is desirous of genuine partnership with the private sector to develop the economy.

    Akinfolurin assured participants of an exciting and top quality training sessions. MOREACADEMY,  he pointed out, “will provide first class trainings and workshops that are structured for the Nigeria economy; hence its relevance . The training programme is expected to draw participants from the banks, primary mortgage institutions (PMI) ; real estate developers, real estate practitioners, state governments, Federal Housing Authorities and  housing corporations in Nigeria.

    MOREACADEMY, a public-private-partnership project between CMD, a parastatal  of National Planning Commission and Western Atlantic Corporations Limited (an investment management, corporate consultancy and training company),  is said to offer courses in both Real Estate and Mortgage Education for mortgage loan originators, mortgage loan processors, underwriters, mortgage brokers, mortgage lenders, real estate brokers/agents, property managers, appraisers/valuers, and real estate inspectors/developers.

  • Adeboye’s wife seeks excellence in mortgage banking

    Life of Church Christian Church of God (RCCG) General Overseer Worldwide Pastor (Mrs) Folu Adeboye has urged mortgage bankers to promote the virtues of excellence and honesty in banking.

    She spoke at the opening of the head office of Jubilee-Life Mortgage Bank (JLMB), owned by the church in Victoria Island, Lagos.

    Mrs. Adeboye, who represented her husband Pastor Enoch Adeboye, recalled that in the 1990s, some mortgage banks after collecting customers’ money collapsed, thereby causing them tears, woes and untimely deaths. She warned the management of the bank to be above board in their customer relations.

    She said: ‘’You don’t need to break the hearts of people after collecting their money and send them to their early graves because you did not pay back.’’ She charged the staff to be unique in service delivery and carry out their responsibilities diligently.

    Chairman of the bank Elder Felix Ohiwerei described the event as glorious, adding that it was the first time that the 14-year-old bank would have its own offices, having been on rented apartments. ‘’In the past, people found it difficult to reach us. Now, we are in a spacious place where you can do so,’’ Ohiwerei said. He thanked customers for their support, and urged them to continue to bank with the lender.

    Its Managing Director, Aderemi Olatunbode said the lender was licensed in 2003 and commenced business the following year. From a shareholders’ capital fund of N200 million and a branch, it has grown to N5 billion with six branches. In response to those who accuse the bank of being unknown.

  • Retirees demand mortgage reimbursement

    The Contributory Pensioners Association of Nigeria (COPAN) has called for reimbursement from their contributions to the National Housing Fund (NHF).

    Its leader, Mr Kayode Da Silva, urged President Muhammadu Buhari to direct the Federal Mortgage Bank to reimburse contributors.

    ‘’Many of us who are retired even up to three years are yet to be reimbursed by the Federal Mortgage Bank,” he said.

    Da Silva said the pensioners had witnessed untold hardship, following the alleged refusal of the Federal Government to pay their pensions and gratuities since they retired in 2015, adding that  the scheme stipulated payment must be done within three months of retirement.

    He noted that neither the Federal Government nor the National Pension Commission (PenCom) offered reasons for the delay, adding that the development led to the death of many retirees.

    “Pensioners should not be made scapegoats for the ills and shortcomings of Federal Government agencies and personnel,” he said.

  • Osibogun backs mortgage financing

    The immediate past President/ Chairman of Council, the Chartered Institute of Bankers of Nigeria (CIBN), Mrs. ‘Debola Osibogun, has said that a developed mortgage finance sector impacts on country’s economic growth and development.

    In her valedictory speech titled: ‘Rethinking Nigeria’s Mortgage Financing Policies for Sustainable Development and Global Competitiveness’, she said the mortgage industry could help in cutting interest rate on loans, which will boost housing affordability.

    “The obvious outcome is that there is a gradual shift from the perspective that housing finance is mainly concerned about mobilising short-term household deposit for long-term mortgage financing to a perspective that housing finance is more closely integrated with broader capital market developments,” she said.

    However, she noted that against the background of the challenges of delivering affordable houses to Nigerians, there is need for a rethink of the approaches used hitherto in order to achieve the objectives of the housing policy.

    “Looking at the past, analysing the present and projecting into the future, there is the compelling need to take a second look at what we have done as a nation to promote housing delivery, ensure better development, and global competiveness so as to make Nigeria an investment destination for housing delivery,” she said.

    She said the Nigerian housing policy has always emphasized that housing must be seen in the context of overall national development which includes social development, the generation of employment opportunities, the geographical distribution of the population and the location of industrial, commercial and agricultural activities.