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Operators keep mute on Lagos mortgage bill

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By Yinka Kolawole
Operators in  the mortgage industry have refused to comment on the  proposed law by the Lagos State government to ensure that workers and residents in the state have access to cheap mortgage facilities.

Some of the operators contacted by Vanguard refused to make any comment  saying they are awaiting  details of the document especially  how the law will operate.

Meanwhile, the Committee on Finance of the Lagos State House of Assembly will today hold a public hearing on the bill. Known as the Lagos State Mortgage Institutions Bill, it seeks to make it mandatory for mortgage firms to offer cheaper interest rates for houses in state-owned schemes.

Mortgage operators are expected, at the forum, to share experiences and suggest possible ways of boosting home ownership through the state’s mortgage scheme. The bill is aimed at better positioning the state’s mortgage scheme in order to enhance mass construction of houses to ease accommodation concerns of residents.

It will be recalled that the Lagos mortgage scheme was launched in 2007, with an initial capital outlay of N40 billion provided by five banks and issued on a 25-year tenure for workers at the rate of 10 per cent per annum. The banks are Oceanic Bank, Skye Bank, First Bank Nigeria Plc, United Bank for Africa and Access Bank.

The state government however considers the interest rate still too high for the average Lagos worker and is therefore exploring the possibility of getting cheaper mortgage with the enactment of the new legislation. The scheme is open to all, including people in the private sector who have a jo


b or verifiable means of income and who meet the obligatory criteria of the participating financial institutions.

Speaking recently at a function in Lagos, the Speaker, Lagos State House of Assembly, Mr. Adeyemi Ikuforiji, said that the second phase of the state mortgage scheme will soon commence and called on PMIs to support the state in achieving its goal of providing houses for another batch of workers.

Ikuforiji, who was represented by the Chairman of the House Committee on Mortgage and other Financial Institutions, Mr. Adeola Olalekan, noted that the consolidation of the banking industry in 2005 failed to make significant impact on the housing finance sector. He appealed to mortgage firms to expand prospective house owners’ opportunities by offering them single digit interest rates as low as 10 per cent with the loan tenor of 10-15 years. “This system will go a long way in encouraging borrowing and contribute immensely to the growth and development of the industry as well as allaying the fears of mortgage loan seekers who are already disillusioned about the system.

“We need to turn failure into success by first admitting that we have trodden the path of inconsistent housing policy for so long and then draw a sincere road map that will see prospective house owners have their dreams come true in the nearest future. The National Housing Fund, which has remained moribund for some time now should be made functional to restore depositors’ confidence in the housing body,” he stated.

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