By Elizabeth Adegbesan
The Central Bank of Nigeria (CBN) yesterday, said it has lifted the restriction on Mortgage Refinance Companies, MRCs, against refinancing mortgages of non-shareholder banks Mortgage Refinance Companies, MRCs, from.
The apex bank disclosed this in a circular titled: “Regulatory and Supervisory Framework for the Operations of a Mortgage Refinance Company (MRC) -Approval to refinance non-member Bank.”
The circular signed by Director, Financial Policy and Regulation Department, CBN, Ibrahim Tukur, stated: “The extant Regulatory and Supervisory Framework for the Operations of a Mortgage Refinance Company provides in Section 22.214.171.124 that a mortgage refinance company (MRC) shall not, without the prior approval of the CBN, extend total outstanding credit to any single borrower which is equal to or more than twenty times the value of the borrower’s shares with the MRC or 25 percent of its shareholders’ funds unimpaired by losses. This provision negatively impacts the mortgages sub-sector as it constrains MRCs from refinancing the mortgages of non-shareholder banks.
“Consequently, the restriction on non-member mortgage lenders from refinancing their mortgages with MRCs has been removed. MRCs are hereby permitted to refinance the qualifying mortgages of mortgage lenders that do not hold its equity, subject to compliance with all other relevant provisions specified in the Framework.”