Spirited to increase estate development and home ownership in Nigeria, the Federal Mortgage Bank of Nigeria (FMBN), has proposed a fresh initiative, which will usher in an Estate Development Guarantee (EDG) scheme
The bank’s made this known to stakeholders recently in Abuja at a sensitization workshop on the revised operational framework of Estate Development Loan (EDL), organized by the Real Estate Developers Association of Nigeria (REDAN) with the support of FMBN.
Objectives of the one-day forum, which had participants from both public and private organizations, are to sensitize real estate developers, investors and stakeholders in the real estate housing sector on the general framework, processes, guidelines, requirements and benefits associated with the FMBN’s estate development concessioning lending window and to create a veritable forum for exchange of ideas on the challenges faced by developers in accessing the EDL; and to consider and/or exploit other available opportunities in the drive towards promoting affordable housing delivery in Nigeria.
The forum also afforded stakeholders to discuss problem area and proffer likely solutions towards promoting affordable housing delivery in Nigeria among others.
Stakeholders at the event commended the various initiatives so far introduced by the federal and State governments on mass housing delivery, especially proposal for the EDG’s scheme, which was said would take off soon.
Already, nation’s mortgage bank has created some windows for estate development in the country, but the new proposal of guaranteeing, was wholeheartedly accepted by the developers.
But the stakeholders tasked the apex’s mortgage institution to present the modalities of the new offer to FMBN, REDAN and Mortgage Banking Association of Nigeria (MBAN) joint committee before the scheme eventually takes off.
The workshop also recommended adoption of a loan security system with the deposit of the documents along with property, executed memorandum of deposit of deeds, which conveys equitable mortgage to the lender (FMBN). This security, according to the developers could be translated into a legal mortgage in future in the event of default or occurrence of an unforeseen eventuality in order to recover the loan by foreclosing the security.
In a joint communiqué by REDAN’s President, Chief Olubode Afolayan and Chairman, FMBN’s Board, Alhaji Deda Atta, the stakeholders also recommended adoption of a tripartite deed of legal mortgage between Primary Mortgage Institutions (PMI) and beneficiaries and reassignment of the perfect deed of mortgage into a single documentation that captures the interest of all parties, adding that this will greatly safe cost and timely perfection of titles.
Attendees at the parley, who took time to x-ray the numerous challenges militating estate development and access to home ownership in Nigeria urged FMBN to consider all issues raised and immediately act on them to restore the confidence of developers, National Housing Fund (NHF) contributors and other stakeholders.
Some of the recommendations include that FMBN considers waiver of the requirements for developers to have a paid up capital of at least 25per cent of the loan amount applied for to access the Estate Development Loan (EDL) window, recapitalization of the apex’s mortgage bank to the tune of at least N250 billion, enforce the provision of the NHF Act, 1992 by compelling banks and insurance companies to make mandatory contributions to the fund, and provide some incentives to encourage this and introduce a 500 billion economic stimulus package for the housing sector.
The developers also recommended the re-organization and decentralization of the legal department of FMBN to effectively reduce delays often experienced in legal searches and perfection of mortgages and loan securities.
Canvassing for cooperation and better working relationship between FMBN and other government agencies, the developers said the apex’s bank to obtain the support of Federal Ministry of Lands, Housing and Urban Development (FMLH&UD) to organize a forum to enlighten land registration officers in the impact of their advices on serial assignment, creation of sub-leases and mortgages in favor of the PMIs and subsequent collation of same into blocs of mortgages in favor of FMBN, which most are unfamiliar with, and have expressed reservations on. They said the form should also include a discourse on modalities for serial release of titles from the bloc(s) of mortgages as individuals redeem their loan.
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Source: The Guardian