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Property title critical to mortgage creation – FMBN

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Chairman of Federal Mortgage Bank of Nigeria (FMBN), Mr. Bisi Ogunjobi, has reiterated the importance of possession of property titles to mortgage creation and refinancing.

He made the remark at a stakeholders’ forum, in Abuja, to discuss effective implementation of the Nigerian Mortgage Refinance Company (NMRC) which was launched recently by President Goodluck Jonathan. Among other things, the forum discussed land availability for affordable housing delivery, housing construction financing, building code and improving foreclosure processes to enhance housing access.

Ogunjobi said it is very difficult for FMBN and primary mortgage banks (PMBs) to create mortgages, talk less of refinancing them, without a system in place that allows people have titles to their houses.

“In all the states, if we don’t have a title to a property there is no way it can be turned into asset to refinance the bank. If you talk of mortgage, it is an individual personal title related to a property. So unless we have a system that allows each person, each house to have a title it becomes very difficult for the PMBs and for the FMBN to be able to create a mortgage.

“Once we cannot create a mortgage it means we cannot even refinance the mortgage. Today, only very few of them have the capacity to create mortgages. If you look at a lot of them, the portfolio which is on mortgage is very limited. Once that is done every other aspect can be easily handled, particularly with the reform that is going on in the FMBN in terms of computerisation, in terms of the e-platform which have been introduced whereby if you are a contributor of NHF you can access your account and know exactly what you are contributing.

“At a stage when your contributions come to the account then you have an alert. But some of the problems in the past still exist, in that some people paid and they are not remitted to the FMBN. So the FMBN is not in position to identify who and who have actually made that list. At the end of the day, there is confusion and people believe that they are not getting value for their money. It is not the number of the mortgage banks that matters but the effectiveness and capacity of these mortgage banks to deliver in providing mortgage,” he stated.

In a related development, UN Habitat Programme Manager for Nigeria, Mal. Kabir Yari, also speaking at the event, counseled that mortgage alone should not be treated in isolation of other components of housing development.

“Mortgage is only one component. Housing has about seven components, such as building materials, land, infrastructure, etc. There are so many of them that are part of the building industry. If they cannot access land, how will they build houses? If you are allocating land for housing, locate it near jobs, because housing is not in isolation in itself. Housing is related to so many other economic activities. It is related to school, place of work, place of worship etc.,” he stated.

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