November 30, 2005/Source ThisDay

Mortgage institutions have called for a review of the judicial, legislative and regulatory environment in which they operate in the country.

Led by Federal Mortgage Bank of Nigeria (FMBN), they expressed concern that never-ending  injunctions granted by  courts to defaulting borrowers serve as  impediments  to the growth  of the country’s mortgage institution, which is still at the infant stage.

Speaking yesterday in Abuja at an agreement signing ceremony with commercial banks, Executive Director, Capital Market,  Mr. Oluwole  Adeniran, decried  issuance of court injunction by  law officials especially when it already became obvious  that borrowers have breached the terms of agreement with banks.

He said court injunctions were now being used by defaulting borrowers to avoid loan repayment, calling for the harmonisation of the operations of all stakeholders, going forward.

Adeniran decried the lack of linkages between the capital market and the mortgage industry as well as the failure of legislative and regulative constraints.

He warned that bankers should not be blamed for not being supportive of the mortgage industry. He  called on existing and prospective mortgage financiers  to approach  the capital market for long term funds as a way of ending this problem Adeniran explained that  the agreement was   designed to develop the secondary mortgage institution as well as allow FMBN to buy mortgages off the banks.

The agreement was signed between FMBN, First Interstate Bank Plc, Zenith Bank Plc and Union Homes Savings and Loans.

In his remarks, Managing Director of First Interstate Bank, Mr. Kayode Pitan said his bank  has committed to the home ownership programme on which the agreement was signed.

He described the programme as  an innovative financial instrument that will deepen the funding  for mortgage financiers particularly commercial banks, which have been compelled to engage in serious banking  business by the new banking consolidation agenda of the Central Bank of Nigeria (CBN).