Poised to take-off with N13.2bn equity

The Nigeria Mortgage Refinance Company (NMRC) has commenced moves to ensure uniform underwriting standards for  mortgage loans in the country, even as it is set for operational take-off with N13.2 billion equity already raised.

NMRC is a private sector driven liquidity facility company set up to develop the primary and secondary mortgage markets by raising long-term funds from domestic capital market as well as foreign markets thereby providing accessible and affordable housing in Nigeria.

Mr. Sonnie Ayere, CEO, NMRC, speaking at the end of a two-day workshop on “Uniform Underwriting Standards for Mortgage Loans”, last week, in Lagos, noted that standards are needed to ensure uniformity of mortgage practice nationwide.

He was accompanied by Dr. Femi Johnson, President, Mortgage Banking Association of Nigeria (MBAN); Ms. Pamela Hedstrom, Senior Consultant, IFC; Mr. Chinua Azubike, MD, Dunn Loren Merrifield, NMRC’s Advisory Partners; and Dr. Gbolahan Elias, Legal Consultant.

Ayere asserted that NMRC has currently raised equity of about N13.2 billion, made up of $20 million, being the first tranche of the IFC’s $300 million facility, and a Tier 1 capital of N10 billion. He said 21 States of the federation have currently signed on to be part of the NMRC facility.

Out of these, four States namely: Kogi, Abia, Enugu, and Akwa Ibom States are said to have expressed firm interest in working with NMRC towards developing a mortgage law. by agreeing to comply with required regulations. According to him, NMRC is in the process of drafting a model law to be passed by all the participating states.

“With all the standards set to be in place, NMRC is set to full operational take-off by the first quarter of 2015, at the latest,” he added.

The NMRC boss said the workshop was essentially geared towards exposing mortgage originators (mortgage and commercial banks) to uniform standards for granting mortgage loans to borrowers (prospective homeowners) that will qualify for NMRC refinancing facility which will lead to more affordable home ownership in Nigeria.

“The goal of the workshop was to provide support for the private housing finance sector in Nigeria by: promulgating mortgage lending standards and procedures within the Nigerian mortgage market, thereby facilitating improved access to housing finance; and developing and promulgating criteria for acceptable mortgage loans, including payment performance, financial terms, legal contract terms, mortgage loan product designs, mortgage loan underwriting criteria and contents of mortgage loan documents.

“Lending standards promote efficiency and mitigate the legal and operational risks inherent in mortgage lending by ensuring quality collateral, adequate property title, proper registration and enforcement of mortgage liens, and maintenance of efficient collection processes for up to 20 to 30 years.

Such standards balance the requirements of responsible finance with lenders’ needs to enforce their contracts. NMRC’s goal is to act as a catalytic and focused advocate to address the issues of standardisation and effective risk management.

The mortgage eligibility standards developed by NMRC will act as industry standards, thereby promoting efficiency and mitigating the mortgage financing risks in the market,” he stated.

In his remarks, Johnson who is also a non-executive Director of NMRC, assured that the mortgage banking sector is ready for the take-off of the refinancing company. He said a total of 36 primary mortgage banks (PMBs) have been certified by the Central bank of Nigeria (CBN) to have met the capitalisation requirements to operate either as State or National mortgage banks.