MBAN, operators plan non-interest mortgages, lobby for intervention fund

Adeniyi Akinlusi is the President, Mortgage Banking Association of Nigeria (MBAN) and Chief Executive Officer, TrustBond Mortgage Bank Plc.

Gearing up for a veritable funding source for the sub-sector, mortgage operators have moved to explore the suitability, applicability and the possibility of adopting the non-interest mortgages to unlock the potentials of the Sukuk model.

The operators, under the aegis of the Mortgage Banking Association of Nigeria (MBAN), agreed in a seven-page communiqué after its chief executive officers retreat in Abuja, to finalize its Uniform Mortgage Underwriting Standards for non-interest mortgages and create platforms for better education of the employees and mortgage brokerage companies on the proposed model.

Mortgage banks agreed to un-bundle the sub­sector in the main areas of mortgage guarantee and insurance as well as collaborate with the mortgage brokerage companies to deepen mortgage financing, thereby devolving some of their functions to the mortgage brokerage firms to ensure more vibrancy.

They advocated that MBAN should explore collaboration with building materials manufacturers to reduce the cost of houses and make housing affordable as well as resolved to explore viable options for cheaper sources of funds with a view to reducing the interest rate on mortgages to single digit.

Consequently, they plan a tripartite advocacy for intervention fund for the sub-sector in partnership with Central Bank of Nigeria (CBN), National Pension Commission (PENCOM) through the proposed interest rate matching fund scheme and a home grown initiative for tying mortgage to pensions, which will encourage homeownership and lower interest rate on mortgage.

The document, signed by MBAN president, Adeniyi Akinlusi and the Executive Secretary, Mr. Kayode Omotoso, noted that since infrastructure constitutes over 30 per cent of the cost of housing delivery; Federal, State and local governments should strive to provide support to estate developers by stepping up provision of infrastructure to enhance delivery of affordable housing in the country.

The association plans to embark on constructive engagement/advocacy with the governments for improved infrastructural development to drive down the cost of housing delivery, especially for the low and middle-income earners.

They further recommended that Federal Mortgage Bank of Nigeria (FMBN) and MBAN should take necessary steps to fast track the evolution of new business models that would include strategies to streamline on-line processes for access to the NHF scheme to mitigate the challenges of response time to secure approval from FMBN on National Housing Fund (NHF) loan applications. It was also agreed that both FMBN and MBAN should collaborate to create public awareness on the NHF scheme, and its critical imperative to mortgage for home ownership in Nigeria.

The mortgage firms prescribed that MBAN and other stakeholders should explore how data gathering and extraction strategies can be incorporated in the operational strategies of each mortgage bank, to make mortgage process quick, smart and efficient and to enhance decision making and efficiency in the sub-sector.

They agreed that MBAN should collaborate with other stakeholders such as the CBN, Nigeria Mortgage Refinance Company (NMRC), FMBN and Real Estate Developers Association of Nigeria (REDAN) for the purpose of approaching the National Assembly for expedited action on amendments to the various laws affecting the mortgage/housing sub-sector; especially those related to foreclosure and improving the operations of the NHF scheme viz collection, enhanced coverage and reducing the housing deficit.

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