Mortgage Warehouse Funding Limited

Mortgage Warehouse Funding Limited (“MWFL”) under its N20 billion Asset-Backed Commercial Paper Programme has pre-financed its first series of mortgages to one of its member mortgage banks, Trustbond Mortgage Bank Plc.

A total of four mortgages were pre-financed to the tune of N88.5 million and funds have been disbursed to TrustBond Mortgage Bank Plc. This short-term pre-financing vehicle will enable the mortgage bank to begin to expand its origination capacity and ensure the availability of mortgages for intending homeowners in Nigeria, whilst ensuring the steady growth of the mortgage subsector in the Nigerian housing market.

[READ MORE: Analysis reveals Nigeria’s mortgage lending rate is about the highest in the world]

Commenting on this development, Mr Sonnie Ayere, the MWFL chairman said that, “It is gratifying to finally see MWFL fund its first bank at a holding duration cost of 9.59%. Like everything else, proof of concept is most important and that hurdle has now been scaled. The Conduit is now looking forward to funding more of its member banks and giving them the firepower to go out there with a 100% confidence to give mortgage financing to Nigerian citizens wishing to get on to the property ladder.”

Also reacting to the development, Mr Niyi Akinlusi, President Mortgage Banking Association of Nigeria (MBAN) stated that, “The successful completion of Series 1 funding by MWFL with pre-finance Of TrustBond’s mortgages of over N88m is very significant for the mortgage industry and the larger economy. It is the last piece of the jigsaw puzzle in connecting the mortgage industry to the money market after linking the mortgage market to the capital market through the bond issuance activities of NMRC in the capital market. This signposts the beginning of continuous flow of liquidity from the money market to the mortgage industry and another major initiative in making Nigerians homeowners and reducing the national housing deficit of over 20 million units.”

MWFL is designed to complement the Nigeria Mortgage Refinance Company (“NMRC”), in that whilst NMRC is licensed to provide long-term funding to the mortgage sector via secondary refinancing, MWFL serves to support the sector by providing short- term up-front funding. The primary mandate of MWFL is to provide short term liquidity to its Member Mortgage Banks (“MMBs”), in order to enable them to originate new eligible mortgage loans strictly based on the Mortgage Subsector Uniform Underwriting Standards.

The following mortgage banks constitute the current membership of MWFL:

  • Abbey Mortgage Bank Plc;
  • Brent Mortgage Bank Limited;
  • Homebase Mortgage Bank Limited;
  • Imperial Homes Mortgage Bank Limited;
  • Jubilee Life Mortgage Bank Limited;
  • Lagos Building Investment Company Limited;
  • Mayfresh Mortgage Bank Limited;
  • TrustBond Mortgage Bank Plc;
  • CityCode Mortgage Bank Ltd; and
  • Infinity Trust Mortgage Bank Plc.

MWFL is sponsored by several Mortgage Banks, the Mortgage Bankers Association of Nigeria (“MBAN”), Nigeria Mortgage Refinancing Company Plc (‘NMRC”), Lion’s Head Global Partners through the African Local Currency Bond Fund (as Initial Subordinated Note Subscribers), DLM Advisory Partners Limited and CitiHomes Finance Company Limited (“CitiHoms”), a CBN-licensed financial institution.

[READ ALSO: Dangote seeks mortgage financing in Nigeria]

To be eligible for pre-financing from MWFL, a mortgage bank must meet the following criteria:

  • be a Member Mortgage Bank of MWFL and must have executed the master purchase;
  • pre-finance and servicing agreement;
  • be a participating Member Mortgage Bank of NMRC and must have executed the master purchase, refinance and servicing agreement with NMRC;
  • must be rated by a recognized rating agency in Nigeria with a current Servicer Quality Rating of SQ3(GCR); and
  • must be current with its pension contribution and possess a current PenCom Compliance Certificate.

In addition to the above criteria, loans originated by MMBs requiring funding from MWFL must be underwritten with the strictest adherence to the Mortgage Subsector Uniform Underwriting Standards.

 

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