MBAN, operators plan non-interest mortgages, lobby for intervention fund
GEARING up for a veritable funding source for the sub-sector, mortgage operators have moved to explore the suitability , applicability and the possibility of adopting the non-interest mortgages to unlock the potentials of the Sukuk model.
The operators, under the aegis of the Mortgage Banking Association of Nigeria (MBAN), agreed in a seven-page communiqué after its chief executive officers retreat in Abuja, to finalize its Uniform Mortgage Underwriting Standards for non-interest mortgages and create platforms for better education of the employees and mortgage brokerage companies on the proposed model.
Mortgage banks agreed to un-bundle the sub - sector in the main areas of mortgage guarantee and insurance as well as collaborate with the mortgage brokerage companies to deepen mortgage financing, thereby devolving some of their func- tions to the mortgage brokerage firms to ensure more vibrancy.
They advocated that MBAN should explore collaboration with building materials manufacturers to reduce the cost of hous- es and make housing affordable as well as resolved to explore viable options for cheaper sources of funds with a view to reducing the interest rate on mortgages to single digit.
Consequently, they plan a tripartite advocacy for intervention fund for the sub-sector in partnership with Central Bank of Nigeria (CBN), National Pension Commission (PENCOM) through the proposed interest rate matching fund scheme and a home grown initiative for tying mortgage to pensions, which will encourage homeownership and lower interest rate on mortgage.
The document, signed by MBAN president, Adeniyi Akinlusi and the Executive Secretary, Mr. Kayode Omotoso, noted that since infrastructure constitutes over 30 per cent of the cost of housing delivery; Federal, State and local governments should strive to provide support to estate developers by stepping up provision of infrastructure to enhance delivery of affordable housing in the country.
The association plans to embark on constructive engagement/ advocacy with the governments for improved infrastructural development to drive down the cost of housing delivery, especially for the low and middle-income earners.
They further recommended that Federal Mortgage Bank of Nigeria (FMBN) and MBAN should
Mortgage banks agreed to un-bundle the sub sector in the main areas of mortgage guarantee and insurance as well as collaborate with the mortgage brokerage companies to deepen mor tgage financing to ensure more vibrancy.