Honorable Fashola

[nigerian_admin]

July 31, 2017

Honourable Tunde Fashola,
Minister of Power, Housing, and Works
Abuja, Nigeria.

REQUEST FOR THE MINISTER’S HEARING

A Unique Housing Mortgage System Required for Economic Growth.
Housing in developed economies is about 12.5% to 20% of GDP. In Canada housing and real estate is about 19% of $1,520 billion dollars GDP in 2016, of a population of 36.55 million people. Housing and real estate is also about 50% of our economic growth in 2016.
http://www.macleans.ca/economy/business/how-the-housing-market-is-pumping-up-our-gdp-numbers/
Housing and real estate are also on the top ten leading indicators of economic growth.
http://www.investopedia.com/articles/personal-finance/021715/economic-indicators-canada.asp

Housing mortgage
Advanced economies realized that the primary basic need of humans are food, shelter, and security. With the understanding that these are needs of everyone they developed the infrastructures that will support the society to access them and the means to generate resources from it to support other social and economic structures.
The benefits of housing mortgage program
It assures patriotism: A place to keep our family safe and warm that each of us can access at an affordable price will reduce stress and burden on the family. The love for our country will be immeasurable because if the country provides me the means to attain my basic need she loves me and I will love my country back.
Houses will no longer be built for many years and will always be built safely to regulated code.
A mortgage program of 10-25yrs will lessen shelter cost and increase disposable income that increase spending.
Housing creates unlimited employment opportunities in services, labour, manufacturing, wholesaling and retailing.
Housing is a major source of revenue for the State from property taxes, that is used for roads, sewer, education, law enforcement, and other services. This will significantly reduce transfer payments to the States
It will foster relationships between banks, insurance, individuals, and the government.
The limitations of creating a housing mortgage program that will stimulate our economy in Nigeria.
The risks in our society is too high to access capital because majority have no life insurance, medical insurance, disability insurance, auto insurance therefore our interest and insurance on loans are high.
Land cost is too high. There must be land reform.
Most of the products used for housing are imported. Industries are less motivated to produce in Nigeria because our risks are too high. To have full advantage of this program we must induce producers of most utilized products in housing.
There is no individual composite portfolio to reference individual prior compliance to contractual commitments.
The Lands Title office has yet been digitized to provide immediate and updated land ownership and/or transfer and houses are still not properly numbered.

Structuring a Housing Mortgage Program in Nigeria.
There are three types of housing mortgage plans that could be utilized to stimulate our economy.
Housing mortgage on houses that has not already been built.
There will be five participants in this housing mortgage program and there will be rules and guidelines. The participants will include the banks, insurance institution, Nigerian housing mortgage corporation, the builder, and the mortgagee.
The Builder: Provides the mortgagee the costing and blue print of the house. The builder must be willing to insure his/her employees for accidentals during construction, for structural damages, and any other damages related to the building during the warranty period.
The mortgagee: The mortgagee must have not less than10% down payment of the house to build. Must be willing to insure the house against damages for the period of the mortgage. Must have life insurance which will assure funds in the estate in case the mortgagee’s life is impacted, and must be qualified to afford the monthly payment for mortgage, and must have insurance on the building.
The banks: The banks will act in good faith and due diligence to assure the qualification of the mortgagee for the loan, ascertain that the cost presented by the builder is appropriate, ensure that the builder has a permit to build, and collects the 10% down payment. The bank will insure the cost of the mortgage with the Nigerian housing and mortgage corporation for default, ensure that the mortgagee’s property is insured for damages, that the mortgagee has life insurance, and follow the rules and regulations of the Nigerian housing mortgage corporation.
The insurance institution: Will insure assets by the guidelines set by the Nigerian housing corporation which may include lesser premium with good values for mortgagees with life insurance, disability insurance, medical insurance and auto insurance.
The housing and mortgage corporation: Will insure the mortgage. Will set all the rules and regulations of this housing program.
Example of the housing mortgage program for houses to be built;
Assume Segun is approved by the bank for a mortgage of N3,000,000.00

Builder upon completion of contract is paid …………………… N3,000,000.00
The down payment for the mortgage ……………… N300,000.00
Mortgagee portion [25 yrs. Mortgage) ............... N2,700,000.00

Builder upon completion ...……………………........ N3,000,000.00
The builder’s profit assume10% …………………………………... N300,000.00
Builder pays back the short-term loan…...…….................. ..N2,700,000.00

The mortgagee will pay the mortgage for 10-25years depending on the mortgage term.
If we assume that both the builder and the mortgagee borrowed from the same bank, the bank has recovered its full payment in about 4 to 5months, the time to build the house, while the mortgagee pays monthly mortgage for the next 25years. The mortgage is insured with the housing and mortgage corporation, the risk to the bank is very low, and the repayment on loan, is relatively quick which could be recycled for about three different mortgages a year. Therefore, the Housing and mortgage corporation may negotiate mortgage loan with the bank at 3% interest over prime. Regardless of source of funding for this venture the amount is vacuumed. There is no increase in money supply.
The risk to the Nigerian housing mortgage corporation is also very limited because of the following reasons;
The last thing the head of the family wants to lose is a house to keep the family save and warm
The mortgagee has already committed 10% down payment therefore resale of the property could not be a loss in case of default.
Houses and the land that it sits on almost always appreciate and the land and the house is going nowhere.
The house and the mortgagee’s life is insured.
Housing mortgage on houses already built and owned but necessary for upgrade to code and mortgage on housing that had already been built for purchase
There are many houses not built to code and not painted. These are sources of employment and economic growth. We could apply the followings:
Estimators from banks assess the cost required for upgrades to code and painted.
Legislate that every house be painted and upgraded to code within five years.
Legislate that houses be insured. It is necessary to have all houses insured to reduce premium with good value. It is also necessary for continuity of every citizen and our economic growth
Narrate the Housing mortgage program to the populace.
Encourage those who want to participate right away to contribute the 10% of the estimated cost with a maximum two years waiting list for the start of the upgrade from time of contribution. (Leveraging; That should provide the funds to start the program)
Those who are purchasing already built houses on a mortgage plan could also be asked to contribute 10% of the pre-approval mortgage of value of housing qualified for during application with a waiting time of three months from date of construction. There are many ways to accomplish this.
During my presentation to National planning commission the concern was where to access the funds and that this project is ambitious. No one person, department, or institution can accomplish this, there must be collaboration. We need a plan.
There are many prepping to be done prior to starting this program such as:
Digitizing the Lands title’s records on land ownership and transfer.
Assure approved readily trained professionals to build and /or upgrade property to code
Have trained professionals to assess property’s worth.
Support existing housing market; producers, retailers, and distributors business to condition inflation.
Seek and lure manufacturers of housing products to our country and support existing ones to fully exploit the employment and economic growth opportunities.
We must be careful and aware of predatory lending. The rules and regulations must be well documented.
We must ensure that the poor and the middle class are primary target in this objective.
Significantly reduce the cost of certification of ownership hinders home transfer, proof of home ownership, and the ability to insure properties.
Our country is at a tumultuous time. We must be creative to overcome our present economic, political, and social despairs. There are many opportunities in our country it is our social and economic risks that is inhibiting our growth. Nigerian housing corporation will reduce home ownership risk and provide the country immeasurable employment and economic growth. Please don’t wait too long.
The risks in our society is diminishing our economic potential and creating chaos we need to start being creative right away. I sent Segun, your brother, to you right during your first term as Governor and I was relentless in my communication with all these information with the governor’s office and on Community Emergency Center (which I named Call Center) a powerful tool to condition a society to the rule of law if properly implemented. It will be voluminous to share this with you in a single text. You may refer to http://www.nigerianpage.com/viewtopic.php?f=2232&t=68
http://www.nigerianpage.com/viewtopic.php?f=11&t=81
The website you created during your first term was wonderful. You must create the same site as federal minister to capture ideas and information world wide.
I will be in Nigeria August 15th would it be possible to have a hearing?
May you always be guided.

Jim Osiname
34 Magnacca crescent
Brandon, Manitoba
Canada
R7b 2n9
jimbonnieo@hotmail.com
+1-204-727-0777
+1-204-727-3926
+1-204-724-9643

[nigerian_admin]

Please note that at the time this was wriiten, nigerian admin do not realise that Nigerian housing mortgage infrastruture do not accomadate mortgage backed securities.
The mortgaged backed backed securities enables the bank to access her loan right away, while the bank collects the mortgage loan from the mortgagor.
Institutions, organinisations, and individuals invest in mortgage backed securities. The whole society become morgages and mortgagors.