MORTGAGE ARRANGEMENT IN DEPRESSED ECONOMY
This research project is a very crucial study of Mortgage Bank of Nigeria.
The study was motivated by the necessity to identify the economic depression and mortgage management in Nigeria. This form of banking system has been in existence since the banking industries is concern based on given loan and advances.
To sources research problem secondary data were collected. The research instruments used in collecting the data were through textbook libraries professional and trade organizations and internet services.
Data analysis and interpretation gave the following findings:
1. Most of the respondents requires interest rate structure.
2. Most of the respondents companied about rate of payment
3. Loan disbursement/ approval
4. It was also discovered loan rescheduling/foreclosure.
Based on the findings we recommend that
1. Government should provide adequate funding.
2. Government and central bank should create secondary/ intermediary mortgage institution
3. The central bank should review the interest rate structure.
4. There should be a review of payment terms
The conclusion of the study is that depression in economy is the problem of mortgage banks in Nigeria. But if the recommendations will be considered and improved the hidden large potential for the development of mortgage bank in Nigeria will be achieved.
TABLE OF CONTENT
Table of contents
Background of the study
Statement of the problems
Purpose/objective of the study
Significance of the study
Limitation of the study
Definition of terms
Types of mortgage and their rights
Mortgage institution in Nigeria
Conditions precedent to the grant of loans
Types of mortgage arrangement
Sources of data
Location of data
Method of data collection
Recommendation and conclusion
A prominent feature of real property investment is that, it involves the expenditure of large sums if money. As a result, investors in real property hardly fund their projects alone instead they borrow part or all of their capital requirement form financial institutions. Lender usually require collateral securities form their borrower before granting loans to them. this provide an avenue through which loan made to borrower could be recovered in the event of unfavourable business condition or a default by the borrowers.
In mortgage transaction a person who borrows money with a property as security for the loan is know as a mortgage while mortgage is a person who lends money to another under the condition stated above.
The lest in respect of which the property is created is called mortgage lest.
Generally mortgage transaction involves the acquisition of a loan with an interest in property as security. The mortgage transfer his read property to the mortgage to declare his willingness to repay a loan and also provide means by which such loans could be indirectly recovered. The mortgage terms also empower the mortgage to reclaim his property after repaying his dest. Mortgage transaction arises due to lack of trust and uncertainties in the business world.
Mortgage is a Norman French term which originated form the various modes of operation of pledges (Walmsely p.56).
A destor in the olden days pledged his farm-land to a creditor by transferring the physical enjoyment to him if the revenue were large enough they repaid the loan immediately but if not the money for repayment had to be raised separately. The former arrangement was called a “phle pledge” (mortgage) while the late a “dead pledge” (mortgage thus the word “mortgage was formed form dead pledge”) (mortgage) which represent a situation where the preceded form a security property could not repay the loan borrowed. Resulting in a search for alternative mean through which repayment could be made.
As the practice of mortgage developed father, it because usual to transfer the destros land outright the creditor on the ground that the destors could redeem it if the debtor defaults the land automatically becomes the creditors. The principles is effective till date and maintain that the property serves as a security only and should therefore be released whenever the loan is repaid.
In Nigeria today there is large-scale default in mortgage repayment by mortgage due to the adverse economic circumstances. Lenders thus resort to auction sales of mortgage securities in order to cover their operating cost. This practice however is usually against the intention of most financial institutions in Nigeria because of the harsh picture it paints of such an establishment in the eyes of the society.