By Yinka Kolawole
The bid to boost the mortgage market in Nigeria and facilitate better service delivery has prompted operators of the Primary Mortgage Institutions (PMIs) in the country to initiate moves for the  standardisation of existing documents for mortgages.

It would be recalled that a recent World Bank Report ranked Nigeria 173rd  out of 178 countries in the World and 46th  out of 46 countries surveyed in Africa on the ease of registration of property titles.

A communique issued at the end of the recently concluded 9th Annual Retreat for CEOs of PMIs organised by the Mortgage Banking Association of Nigeria (MBAN) in Abuja, revealed that a committee was set up with a mandate to ensure the standardisation of mortgage documents to achieve global and uniform underwriting standards by the first quarter of Year 2010.

The committee is to work  in conjunction with the International Finance Corporation (IFC), the appointed consultant on the mortgages being managed by the Federal Mortgage Bank of Nigeria (FMBN) and Primary Mortgage Institutions (PMIs).

The mortgage bankers called for the restructuring of the National Housing Fund (NHF) to include amongst others, the responsibility for collection of monthly contributions from the various NHF contributors by PMIs and advocated that the Federal Government move the supervision of FMBN from the Ministry of Housing to that of Finance.

They noted that the housing deficit in Nigeria is rapidly growing and home ownership currently stands at less than 25 percent of the total population, which translates into about 84 million people that either do not have homes or that are in poor shelters, and as such align with the “Affordable Housing” policy agenda of the federal government as reflected in the Vision 20:2020 document.

The communique further recommended that the government should introduce appropriate intervention mechanisms to facilitate social housing in the country and as such interventions should address issues as affordability gap financing, land and infrastructure subsidy, effective secondary market, liquidity provision, interest rate subsidies, fiscal incentives, targeted housing subsidies.

The PMI bosses resolved that PMIs should take appropriate steps to enhance their shareholders’ funds capital either by private placements or through the capital market, adding that there is the need for MBAN member-institutions to pro-actively address issues that hinder capacity to extend mortgage credits to their customers.

“It behooves on PMIs to seek viable means of improving access to liquidity in order to meet their goals. This has made it critical for the operators in the sector to come together yearly and continue to forge ahead as a composite team to discuss germane issues,” they stated.

They reiterated the critical need for a Mortgage Liquidity Facility (MLF)/Special Purpose Vehicle (SPV) in Nigeria to provide access to long term funds (refinancing/re-discounting) from the Capital Markets that would enable PMIs extend mortgage financing thereby increasing affordability and availability of Mortgages and ultimately enhancing home ownership for as many Nigerians as possible, through Mortgage Arrangements.

They called for expedited action on the proposed amendments to the legal and regulatory framework that would enable the MLF operate in a conducive, investor-friendly environment in the country, noting that in some other climes mortgage liquidity facilities have successfully been used to increase the number of mortgages, deepen their capital markets, and facilitated overall increase in the rate of home ownership, as measured by Mortgage Debts Outstanding/GDP (MDO/GDP).

The communique further recommended that the Mortgage Liquidity Facility should be Private Sector driven, with core partners being PMIs, Deposit Money Banks, Insurance Companies and Pension Fund Administrators, in collaboration with other Developmental Institutions such as Central Bank of Nigeria (CBN), African Development Bank (ADB), Shelter Afrique and the IFC/World Bank.

The mortgage operators urged the CBN to expedite action on its plan to subscribe to the Mortgage Liquidity Facility (MLF) given the urgent for, and the immense benefits derivable from Mortgage Liquidity Facility by the Mortgage Banking/Housing Finance Sector in Nigeria.

“Government and its agencies should support explicitly and/or implicitly the mortgage liquidity facility in its infancy, so as to give it an enhanced chance of success. This should be in the form of concession, for instance, tax, reduced quotation charges to make bonds issued by the mortgage liquidity facility attractive to its various investors,” the communique stated.