- As mortgage markets become more advanced and
integrated, the argument for having a single
mortgage regulator becomes more powerful.
- The role and remit of a regulator must be
clearly defined in law.
- The regulator should try to increase the
level of trust which customers have in mortgage
providers and mortgage products.
- The Government should take
responsibility for initiating widespread
first-time registration of properties.
- The cost of property registration should be
no more than the administrative costs of
processing the necessary documents.
- Property registration should recognize
current possession, and minimize the requirement
to present notarized documents.
- Valuation should be collected
through a single unified database using shared
data, ideally collected by an association of
property appraisers, or alternatively by a
single grouping of banks.
- Valuation should be based on the actual sale
price and not on the listed sale price.
- Legal Obstacles and Islamic Finance
- Islamic financing structures may
provide innovative ways to overcome legal
difficulties associated with freehold property
title.
- Institutions who lend on the basis of
Islamic financial principles are just as able to
accommodate the varied needs of individual
borrowers as conventional banks, and may be more
sympathetic to the needs of low income
borrowers.
- Products for Low Income Borrowers
- Governments should consider
implementing a version of the Community
Re-investment Act in order to ensure that
available funds are spread to all regions and
towns of a country, even those which are most
economically deprived; and they should also
consider the possibility of requiring lenders to
extend a percentage of their mortgage loans to
low-income borrowers.
- Mortgage lenders need to develop a wide
range of products so as to be able to offer
products which are suited the particular needs
of all sections of the community.
- Funding Long Terms Assets
- In order to establish a deep and
liquid securitization market, Government support
is required to establish a long-term buyer of
mortgages.
- Before securitization becomes a regular
part of the mortgage landscape, best practices
must be established for servicing, underwriting,
disclosure and data retention, so as to ensure
that current mortgages will be easily
securitisable in future years.
On the basis of these preliminary observations
and recommendations, the Financial Services
Volunteer Corps and the Arab Academy for Banking and
Financial Sciences are committed to working with the
participants in this conference, and with others, to
remove the obstacles to residential mortgage finance
in the Arab world.
|
