Advocacy

Taking into account the needs and concerns of our members, MBAN works to foster an effective and competitive market place by promoting a legislative, regulatory and operational environment in which the businesses of mortgage banking service providers can prosper. We engage policy makers, regulators, foreign investors, institutions and individuals to ensure that the interests of all our Mortgage Banks and Mortgage Professionals are adequately represented in nationally relevant issues of Mortgage banking / Housing Finance and delivery in Nigeria.

Most Significantly, MBAN is deeply committed to providing affordable housing to Nigerians via mortgage arrangements in tandem with the Vision 20:2020.

Click on any of the adjoining links to find out more about our advocacy campaigns on Land, Housing & Urban Development, Mortgage Banking Operations and Supervision & Regulation. You can also find a summary of our Strategic Plan here or familiarise yourself with industry related policies here .

Advocacy Campaigns and Actions to date

MBAN/FMBN

Through successful collaboration with the Federal Mortgage Bank of Nigeria (FMBN), MBAN is working to agree obtainable measures for the reform and/or implementation of the following:

• National Housing Fund (NHF) Scheme
• Sustained exclusion of non-mortgage originating financial institutions in the on-lending window of the NHF Scheme
• Placement of Term deposits with Mortgage Banks as done with Commercial Banks i.e. expanding the scope to include Mortgage Banks
• Collection by Mortgage Banks of NHF Monthly Contributions from the bona fide Contributors to the Scheme, on behalf of FMBN, to deepen and strengthen the Scheme.

NIGERIA MORTGAGE REFINANCING COMPANY (NMRC)

MBAN and its Member-Mortgage Banks took the initiative and the lead in coordinating the establishment of a Liquidity Facility Company in Nigeria via Tiers 1 and 2 Capital from local and foreign stakeholders such as the Mortgage Banks, Commercial Banks, Federal Ministry of Finance Incorporated (MOFI), Sovereign Wealth Fund (SWF), International Finance Corporation (IFC) and Shelter Afrique which resulted in the Incorporation of the Nigeria Mortgage Refinancing Company (NMRC).

The Company would provide access to long-term funds needed to boost the Mortgage Banking Sector towards an increase in affordable housing and homeownership.

EXPUNGING THE LAND USE ACT OF 1978 NIGERIAN CONSTITUTION

MBAN has a strong track record for advocating policies and changes to laws which aim at realising the goal of affordable housing for Nigerians.

MBAN in collaboration with other Stakeholders formed a Coalition Group known as the Land Use Act Amendment Advocacy Group (LUAAAG) to push advocacy for removal of the Land Use Act 1978 from the Nigerian Constitution. A Position Paper to that effect was duly submitted to the National Assembly Committee on Amendments to the Constitution of the Federal Republic of Nigeria

CONSOLIDATION/REFORMS OF THE MORTGAGE BANKING SECTOR

The Consolidation/Reforms being carried out by the Central Bank of Nigeria (CBN) on the Mortgage Banking Sector are at the conclusion phase with the Minimum Regulatory Capital of N5billion and N2.5billion for the National and State Authorisation Licences respectively.

Consequently, the CBN has recently issued new, robust Guidelines for the emerged Mortgage Banks that engage in mortgage business operations, in the post-consolidation era.

MBAN/CBN/IFC UNIFORM MORTGAGE UNDERWRITING STANDARDS

MBAN in collaboration with the Central Bank of Nigeria (CBN) and International Finance Corporation (IFC) are at the concluding stages of crafting new Uniform Mortgage Underwriting Standards for the Mortgage Banking Sector. The Standards would form the planks for the re-financing of mortgages created by the Mortgage Banks through the avenue of Nigeria Mortgage Refinancing Company (NMRC).

ADVOCACY WITH NATIONAL PENSION COMMISSION (PENCOM)/PENSION OPERATORS ASSOCIATION (PENOP)

MBAN is exploring the possibility of optimising access to mortgage/housing finance through the platform of the Amended Pension Fund Scheme as a veritable source of long term funding for the mortgage sector to provide affordable housing to the RSA Contributors in particular and the totality of Nigerians, in general.

Land, Housing & Urban Development

Nigeria currently has a housing deficit of 17 million units which today requires about N35 trillion (about $27 billion) to fund. According to World Bank estimates, Nigeria needs to produce about 720,000 housing units annually for the next 20 years to be able to close the housing gap in the country. However, available statistics show that since its inception in 1973 up to 2006, the Federal Housing Authority (FHA) has built only 30,000 housing units. Juxtaposing the housing output in the last 33 years with the present housing needs presents a gloomy picture of the critical housing condition in the country. It is now generally accepted that the best way to help the poor access affordable housing is through long term financing i.e. mortgages. However, this is only viable where home owners have secure tenure of the land they occupy. The Land Use Act as it currently stands makes this condition virtually impossible because it infringes on property rights; requires the state governor’s consent for each land related transaction; inefficiently manages land; and imposes high costs on property transactions.

At 173 out of 178, the World Bank scores Nigeria very badly on property Rights and land registration arrangements. It takes 14 procedures, 82 days and costs of 22.2 per cent of the property value to register the average property in Nigeria today. This places serious constraints on land being used as financial security in the acquisition of a mortgage and thus results in unsecured loans at high interest rates. A repeal of the Land Use Act will reduce institutional delays in secondary transactions in rights of occupancy such as mortgage transactions so that PMIs can make more mortgage loans available on reasonable terms thereby ensuring more Nigerians can access affordable housing.

Specific benefits of expunging the Land Use Act from the Constitution and review land use policies in Nigeria include:

• Ease of access to land and home ownership which will in turn enable the use of land as a means for wealth creation through land-based transactions
• Greater ease of land and housing transactions in particular due to the negation of governor’s consent for titles
•  Vast increase in investment in low income housing and by extension employment for up to 40% of unemployed Nigerians
• Levels playing field by increasing the transparency and accountability in land use and administration so that the process is non-discriminatory, fair and participatory.
• Provides platform for new strategies and concepts to be introduced to our land administration and management system
• Gives National Assembly and Executive more flexibility to pursue policies that enhance social and economic vitality, as well as benefit the conservation of natural resources

Along with the Campaign to have Land Use Act repealed, MBAN is advocating for nine other laws to be reviewed such that the Housing Sector in Nigeria will see a complete transformation. Recommendations to review the following nine laws are already before the National Assembly

1. The Federal Mortgage Bank of Nigeria Act 2005
2. The Insurance (Amendment) Act 2005
3. The Investment and Securities (Amendment) Act 2005
4.  The Mortgage Institutions Act 2005
5. The National Housing Trust Fund Act 2005
6. The Nigeria Social Insurance Trust Fund (Amendment) Act 2005
7. The Trustee Investment (Amendment) Act 2005
8. Securitization Bill
9. Foreclosure Laws Bill

If the proposed amendments are implemented, home ownership will become more feasible and the potential of land as a resource for food, security, poverty reduction, capital accumulation, economic growth and national development will realised inevitably follow.

Mortgage Banking Operations

In the area of Mortgage Banking Operations MBAN supports the following resolutions and seeks to realise them through its advocacy to the Central Bank of Nigeria (CBN) and the Federal Government.

• Introduction of appropriate intervention funding mechanisms by the Federal Government to facilitate social housing in Nigeria. Interventions should address issues of affordability gap financing, land and infrastructure subsidy, effective secondary market, liquidity provision, interest rate subsidies, fiscal incentives, targeted housing subsidies etc
• Access to Tier-2 capital for a national Mortgage Liquidity Facility (MLF) which will provide long term funding (refinancing and re-discounting), as enjoyed by Commercial Banks, from the capital markets. This will allow PMIs extend durable mortgage financing to Nigerians thereby increase affordability and availability of mortgages and ultimately home ownership
• Support from Federal Government and its Agencies for the MLF in the form of concessions (e.g. Tax, Reduced Quotation Charges etc.) so that bonds issued by the Mortgage Liquidity Facility attractive to its various Investors
• Standardisation of the Mortgage Underwriting and Documentation Process in partnership with the International Finance Corporation (IFC) by year end 2011 to create efficiency and uniformity amongst PMIs and other Mortgage Underwriters

Supervision & Regulation

Through its advocacy in this area MBAN seeks to expedited amendments to the laws affecting the legal and regulatory framework of the Mortgage Banking/ Housing Finance Sector from the National Assembly in partnership with the Central Bank of Nigeria (CBN), National Pension Commission (PENCOM) and Securities & Exchange Commission (SEC); for example the New Regime on Approved Persons for Banks, Discount Houses and Financial Institutions