There is a bumpy road to affordable housing in Nigeria as 34 states are yet to adopt the draft Model Mortgage and Foreclosure Law (MMFL) in their territories almost two years the proposal was made.
Investigations revealed that apart from Lagos and Kaduna states, which adopted the law in 2012 and 2017 respectively, other states are yet to embrace the legislation as at the end of January 2020.
Even Ogun and Akwa Ibom states that reached advanced stages before the last governorship election in 2019, are yet to adopt it as at the time of filing the report.
Further enquiries show that some of the new state commissioners of housing are not aware of the law.
The lacklustre attitude of states to adopt model mortgage and foreclosure law is believed among stakeholders to be hindering investments and effective housing delivery in Nigeria.
Besides, it was observed that bank credits to real estate industry had reduced due to the issue associated with mortgage and foreclosure.
The model law is designed to improve the ease of mortgage business and to ensure that foreclosure processes for delinquent mortgages are not protracted to the financial loss of the mortgage lender.
Speaking with New Telegraph, Promoter of Abuja International Housing Show, Mr. Festus Adebayo, bemoaned non-passage of MMFL by the 34 states, saying it was a setback to efforts aimed at enhancing home ownership among Nigerians.
With this development, Adebayo said it had become imperative for the management of the Nigerian Mortgage Refinance Company(NMRC) to have urgent meeting with the Nigerian Governors’ Forum.
Discussion and collaboration with governors, he said, would create the necessary understanding about the law.
He pointed out that for mortgage to thrive in Nigeria, there is need for enabling legal framework that everybody would recognise.
Experts in the housing sector have always maintained that passage of model mortgage foreclosure would enable states to have electronic land registry system and a working mortgage system for easy conduct of searches and timely realisation of collateral of non-performing loans by banks.
Besides, they said it would enable developers have access to land, enable mortgages created to be foreclosed if it is not performing, adding that it would also provide title for people that want to build their houses and use the particular land as a security to get mortgage in the financial institutions.
NMRC President , Adeniyi Akinlusi, in one of the reports, said that failure by states and National Assembly to pass the foreclosure law contributed to the unprecedented housing deficit in the country.
He added that the non-existence of an effective foreclosure mechanism in Nigeria was constituting a disincentive to housing investors.
According to him, the National Assembly must expedite action on the passage of the law affecting the legal and regulatory framework of the mortgage sector; especially related to foreclosure to motivate the mortgage bank to increase their loan portfolio.
Akinlusi said:“Foreclosure law is a legal mechanism, which allows the lender to take possession and sell the secured property (foreclosure” or “repossession) to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide by its terms.
“‘The major challenge is the issue of foreclosure. There is no effective foreclosure mechanism put in place, if you go to court, it would take donkey years,”
Foreclosure law, he said, is needed to be passed by the state and National Assembly so that more people could own their own home.
“Until we have a lot of Nigerians own their homes, it will be difficult to address the issue of economic disempowerment because when you own your home, you can be empowered to attract capital from the banking system,” he said.
He emphasized the need for each state to come up with an effective law that will make foreclosure easy in the state to attract the needed funding and capital from the mortgage bank.
He stated that major stakeholder, Nigeria Mortgage Refinance Company (NMRC), in collaboration with the Federal Mortgage Bank and Central Bank of Nigeria, had been going round the states to tell the states to pass their own law.
The president said: “Each state can simplify the law by coming up with an effective law that will make foreclosure easy in the state.
“Once you have a state that pass this, it would attract funding and capital from the mortgage bank because you can use it as an example. There are one or two states that have passed it and we are engaging with some other states so that once you have good examples in this regard, more funding will go to people in those states and they can own their houses.”
Source: newtelegraphng
