Mortgage banking in Nigeria is being hampered by three major constraints, which are, the regulatory environment, legislative environment and micro-economy environment which make it very difficult for all those operating in the industry.
This was the assertion of Dr Banjo Obaleye, Managing Director, Infinity Trust Mortgage Bank plc while speaking with Africahousingnews during the national workshop of the Association of Housing Corporations of Nigeria (AHCN) held in Abuja November 30 and December 1, 2021.
He said aside from Kaduna State and Lagos State and few other states like Nasarawa,ogun , ekiti, other states who have passed mortgage foreclosure bill into law in Nigeria , other states and the Federal Capital Territory (FCT) have very difficult and cumbersome processes for individuals and developers to get Land title.
The Land Use ACT of `1978 vests all urban lands comprised in the territory of each state, except those vested with the Federal government or its agencies, solely in the governor to hold in trust for the people and allocate to individuals and organisations for residential among other use.
This has been a major hiccup to mortgage banking sector.
Another key factor inhibiting Mortgage Banking is the two digit interest loan he said, adding that it is quite impracticable to take a Mortgage loan for between 17-20 % interest rate for a period of twenty years and the person will not be burdened under such a strangulating condition.
He said his organisation”s support for NHF is because it is has become a credible avenue for the workers to own houses ,as it is the only vehicle available to provide mortgage facility at a single digit interest rate .
Dr Banjo said the low profit margin is not the priority of his mortgage bank but how to create opportunity for people to have a roof over their head especially for those at the base of the pyramid.