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Lagos to incorporate foreclosure in mortgage, property law

By Chinedum Uwaegbulam
05 July 2021   |   4:13 am
The Lagos State Government plans to de-risk the housing and mortgage sector, unlocking its potential for economic growth by incorporating foreclosure law into its mortgage and property policy.

The newly completed Igbogbo housing estate in Ikorodu, Lagos

The Lagos State Government plans to de-risk the housing and mortgage sector, unlocking its potential for economic growth by incorporating foreclosure law into its mortgage and property policy.

The mortgage and property law seeks to encourage growth in real estate and regulate consumer loans for property realisation in the state.

It also seeks to create conducive environment for accessible and affordable mortgage for the benefit of people to acquire their own homes by paying a certain percentage of the cost of the unit and paying the balance over a period of years whilst residing in the property.

The proposed amendment Bill, when signed into law, will include sale by public auction, voluntary surrender of mortgaged property in lieu of foreclosure, and foreclosure in default of payment of mortgaged amount.

The state has already assured financial institutions, including banks that there will be returns on their investments in mortgages, after the amendment of the State’s Mortgage and Property Law.

The Special Adviser to the Lagos State Governor on Housing, Mrs. Toke Benson-Awoyinka, made this known in Ikoyi, Lagos, during a roundtable discussion on the incorporation of Foreclosure Law into the state’s Mortgage and Property Law.

She said that the round table discussion was not only initiated to safeguard development of the real estate sector in the state but also to ensure professionalism and global best practice.

Benson-Awoyinka stated that Governor Babajide Sanwo-Olu, is keen to develop the sector through proper laid down regulations that would ensure that local and international investors are attracted, and that the highest level of integrity is maintained in the real estate sector.

She said Governor Sanwo-Olu has consistently reaffirmed his commitment towards ensuring the provision of affordable and descent accommodation for the citizens, with a view to reduce to the prevailing housing deficit across the state.

Benson-Awoyinka said the state government has adopted multi-dimensional approach to reduce housing deficit to the barest minimum despite the prevailing economy downturn.

Also speaking at the event, the Attorney-General General and Commissioner for Justice, Mr. Moyosore Onigbanjo, said that once the law is passed, issues concerning mortgages in the state will be a thing of the past.

Onigbanjo said that with the law amendment, the state is now providing certainty in the law, regarding sales of mortgage property and foreclosure to give confidence to the mortgagee, who has given out his money, that if there is default, he will be able to realise the security pledged without the undue stress when it comes to litigation.

He urged local and international investors in the real estate sector as well as the financial institutions to look out for the passage of the law, noting that once it is passed, the issues concerning mortgages equity of redemption, foreclosure and sale of mortgage property among others, will be more certain, more predictable, more investor friendly and would protect the vulnerable.

“If banks are sure that they will get back their investment in mortgages, then more mortgages will be given, more homes will be purchased, more houses will be built and at the end of the day, it will be a win-win for Lagos State citizens and the finance industry will be better for it.”

He noted that the gathering, which was of all stakeholders in the real estate industry, was to discuss the issue of having foreclosure law for Lagos State, to deal with the issues that arises on mortgages by financial institutions and banks complaining that they cannot realise their security with the law.

The Chairman, House Committee on Housing, Rasheed Makinde, said the gathering was geared towards finding a robust way of doing business in the real estate sector in Lagos State, adding that the Round Table discussion, aims to make transactions between the financial institutions, mortgage and mortgagor seamless.

“This meeting has also revealed some of the benefits that the mortgage and mortgagor can enjoy, including the issue of voluntarily surrender. With this gathering, innovations have been made into the law to bring it at par with what obtains in the developed nations of the world. We want to strengthen our law so that it can meet the test of time,” he said.

The Managing Director, Nigeria Mortgage Refinancing Company (NMRC), Mr. Kehinde Ogundimu, stated that the law amendments would provide the enabling legal environment/ framework that will attract investors to the real estate sector.

He stressed the need for enormous investments in real estate to make housing available and affordable, adding that government cannot do it alone.

He said housing is a necessity, noting that no effort should be spared in ensuring that it is available and affordable to citizens, either through homeownership or rental.