The Nigerian Mortgage Refinancing Company and the Nigerian Insurers Association are jointly working to integrate title insurance as a mandatory condition to get mortgage loans.
The Director-General, NIA, Mr. Sunday Thomas, who disclosed this to our correspondent in an exclusive interview, said that the NMRC was working with the indigenous underwriters to introduce insurance as a condition for getting mortgage loans the way it was being done in developed economies.
“We had a meeting with the management of the Mortgage Refinancing Company recently and we tried to draft an arrangement that would work because they were integrating insurance into the mortgage refinancing initiative. If they are financing any mortgage initiative, insurance will be part of the requirements,” he said.
The NMRC was officially inaugurated in Abuja in January 2014 by President Goodluck Jonathan.
According to the company, the inauguration formally indicated the establishment of a refinancing company that will develop both the primary and secondary mortgage markets by raising long-term funds from the domestic capital markets and foreign markets to provide accessible as well as affordable housing in the country.
Thomas said the mortgage refinancing arrangement was an initiative of the Federal Government and would be implemented by the private sector.
According to him, some things have to be put in place to make title insurance work like what obtains in advanced economies such as ensuring efficiency in the land registry and land documentation, among others.
He said that the operators would soon commence an awareness on the mortgage refinancing scheme because insurance would become very central at the lending level and property development stages.
Thomas noted that the cost of insurance would be included in mortgage loans.
“Once it starts, some of the existing insurance products will be specifically repackaged for the initiative such as the mortgage policy for lenders and insurance policies that will protect the lender if the borrower dies before the loan is repaid,” he explained.
According to him, there will be insurance provisions for borrowers that lose their jobs or sources of income and cannot continue repaying the loans.
“We have to make sure that the moral hazard is taken care off. The property will be insured against destruction by flood, wind and other hazards,” he said.
Thomas said that the operators were serious about the initiative, adding that a workshop on it would give more instructions and sensitise the public to the scheme.
The NMRC stated on its website that it would provide over 200,000 housing processes, especially for first-time buyers by 2019.
It added, “The NMRC will provide mortgage lending institutions with access to long-term finances at an affordable interest rate, enabling mortgages to be issued by these institutions to Nigerians over a long tenor.
“It will also benefit lower income households from different jobs created by the construction of new housing units and services required to build a home and deliver it to the final customer.”
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