Housing sector experts and stakeholders have commended the decision by more state governments in Nigeria to embrace the model mortgage foreclosure law-an initiative of the Nigerian Mortgage Refinance Company (NMRC).
But concerns remain. Model mortgage is not an end in itself, but a means to an end, which is why these experts are canvassing ease of property registration, particularly land titling, believing that mortgage can only make meaning or thriving where there is easy access to land titles.
As part of efforts at growing a mortgage system that will drive housing affordability, NMRC launched a legislative reform drive in the mortgage sector by proposing a model mortgage and foreclosure law by key pilot states including Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Enugu, Kano and Ogun states.
Today, more state governments are beginning to realize the need for localizing the model mortgage foreclosure law in their respective domain, according to Kehinde Ogundimu, the CEO of NMRC
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“I got a letter from the Ekiti state government that the bill was going to be passed as soon as they resumed. We have made significant progress with Kwara state where the bill has been drafted. We have also made significant progress in Edo state as well as other states. I think states are beginning to realize that they need to be mortgage-friendly in order to attract the investment that is needed in this sector,” he said.
Ogundimu, who spoke at an online real estate conference hosted by the Housing Development Advocacy Network in Abuja, hopes that between now and the next four months, depending on how the Covid-19 crisis turns out, they will be seeing more states signing on to the foreclosure law.
However, the experts say that the mileage being recorded by NMRC can only make meaning when these same states are ready to make land easily accessible to investors, especially private estate developers.
“An aggressive campaign is needed for ease of land titling so as to reduce the inherent problems associated with land ownership. The legal structure is being changed now that the CBN and other stakeholders are championing the adoption of what we know as a model mortgage and foreclosure law, Oladapo Fakeye, Group Head, Strategy & Performance at Federal Mortgage Bank of Nigeria, said Fakeye explained that the foreclosure seeks to make transactions in land, especially mortgage transactions, smooth, efficient, cost-efficient and timely, pointing out that investors would like to apply for C of O, transfer of title or for the consent of the state governor and get same within a few days.
“The cost of land is relatively high in this country, particularly in the urban areas where people actually need houses; but you have the challenge of high construction and infrastructure costs.
“Most developers will tell you that, in addition to building houses, they also have to provide some of the infrastructure needed for people to stay comfortably in those houses—they provide roads, electricity, water and so many other facilities that should, ordinarily, be provided by the government.
He noted that every transaction in the land, particularly as defined by the Land Use Act, must have a governor’s consent for such transaction to be regarded as legal. He pointed out that the processes leading to getting land, title, transferring old title to a new property owner are very long and cumbersome and need to be changed.
Fakeye noted further that accessing mortgages remained a herculean task, explaining that “the high-interest rates on mortgage loans continue to scare developers and this further compounds the problem of affordable housing delivery.”
