CHAPTER ONE

INTRODUCTION

1.1    Background of the study

The Federal mortgage finance limited incorporated July 1993 under. It is fully owned by the Federal Government of Nigeria established to provide credible and responsive housing finance service that will facilitate housing delivery to all segments of the Nigeria Society.

          The establishment of the company informed by Federal Government recognition of the imperatives to direct the old Federal Mortgage Bank of Nigeria of its retail banking and mortgage operations so that Federal Mortgage Bank of Nigeria could concentrative on its rightful role as the nations apex mortgage lending.

          Today federal mortgage finance limited has opened branches in all the state headquarters including Abuja Federal Capital territory, with many saving centers in urban commercial locations with a solid financial and assets base, on unrivalled nations wide branch network or 54 operational outlets and 654 experienced, dynamic and highly competent work force, the company is passed to offer efficient, effective and reliable service that are unequalled in the housing finance sub-sector of the economy.

1.2 Statement of the problem       

This research work will treat the topic mortgage banking and housing policy in Nigeria.

          Furthermore, the problem confronting the mortgage institution in granting loan to people which will assist them either to buy, build or improve their house.

          A great change has been brought to the operation of mortgage financial institution in Nigeria Housing as we all know is one of the basic needs of mankind and it is the most important for the physical survival of man after the provision of food. Decent housing is one of the basic needs of every individual, the family and the community in general.

          As a pre-requisite to the survival of man, it ranks second only to food. It is also one of the best indicators of a person standard of living and his place in the society; the housing an individual lives in is a symbol of his status on measure of achievement and social acceptance an expression of his personality.

          In Nigeria, there is a shortage of adequate housing facilities. Lagos for instance has an average of 3.8 persons per room, and extreme density ranging between 5 to over 7 persons per room. More houses are needed to relieve the existing overcrowding in many Nigeria urban centre’s.

1.3 Research Questions and Hypothesis

An hypothesis is a provisional statement given to guide an investigation. t is a set of testable statement yet to be empirically verified.

This research work has data collected through organizational interviews, extraction from financial journals, textbooks and questionnaire.

1.4    Purpose of the Study

The primary objective of this research work is to know everything concerning federal mortgage banking and housing policy in Nigeria.

i.        Assess the level of change that has been brought to the operations of mortgage financial institution.

ii.       The highlight the impact that provision of loans by mortgage institution has no the number of houses built by individuals and corporate organization.

iii.      To investigate how the mortgage institutions has helped in providing loan to ameliorate the suffering of the masses through national housing find.

iv.      It is also the aim of the research to state the roles of mortgage institution and ensure the implementation of the national housing policy, not only that the research work will suggest possible solutions to various problem encountered by the mortgage institutions.

1.5    Scope of Study

The scope of this study is indicated by the title at this project which is “mortgage banking and housing policy in Nigeria” (A case study at Federal Mortgage Bank in Nigeria).

1.6 Limitation of the Study

          The scope of this research work is limited to the operation of the Federal Mortgage Bank in Nigeria. The limitation encountered during the preparation of this project is timing limitations, during the writing of this research work due to academic workload. Financial limitation which is another problem, materials that are needed for this project are not easily come by due to high cost of materials.

1.7    Significance of the study    

          This research work will be of utmost importance to some group namely banker, Government, Individual, Real Estate organization and the general public.

          It is also the aim of the research to state the implementation and the roles of the National Housing Policy.

1.8    Definitions of Term

·         Mortgagor: The creditor to whom a mortgage is made. The mortgagor retains possession and uses the property during the term of mortgage. The mortgagor obtains an interest on the property.

·         Mortgage Banker: Is a banker who specializes in mortgage financing and operator of a mortgage financing company.

·         Mortgage Financing: These are companies that are mortgage themselves as being mortgage agents for their large mortgage.

·         Collateral: Property pledged as security of payment of debt.

·         Mortgage Premium:      An additional bank fee charged for a mortgage when the legal interest rate is less than the prevailing mortgage market rate.

·         Mortgage Broker: An individual or corporation that rarely originates loans but brings together a lender and a borrower for a fee.

·         Conventional Loan: Is a mortgage loan usually granted by a bank or a loan association.

·         Mortgage Debits: Is indebtedness created by a mortgage and scared by the property mortgaged.