The head of the Mortgage Finance Authority shed light on changes made to the executive charter governing the sector, reports Pierre Loza Nearly four years after the inception of the Mortgage Finance Authority (MFA), the authorities are still campaigning to increase awareness about the nascent mortgage finance sector. In a seminar organised last week, the head of MFA Sameh El-Torgoman told journalists that he expects the mortgage sector to reach maturity in four years' time. With only two mortgage firms currently in the market, Al-Taamir and Al-Masriya, the sector has failed to achieve the growth levels many expected. Torgoman believes that changes made in the sector's governing executive charter will catalyse further growth. So far, 305 mortgage contracts have been signed. Thirty per cent of the contracts went to middle-income households and 67 per cent to limited-income households. Torgoman believes that as the market develops there will be more of a balance between limited- income and middle-income mortgagees. The newly amended executive charter will allow mortgage companies greater flexibility in choosing mortgage candidates. "It is now up to the mortgage company to decide whether the mortgage candidate can fulfill his obligations, based on whatever criteria it sees fit," Torgoman said. The grace period allowed to defaulters will also be reduced from three months to one month, allowing companies swifter repossession procedures. Secrecy of information was also ensured by another amendment, which prohibited the disclosure of information about mortgage seekers. The right of mortgagees to sell their mortgage or to make other uses of their property was also permitted, if the mortgage company found it agreeable. This clause would play a role in reducing the number of defaulters, by providing them with more options before defaulting. Dictation of mortgage companies' back office operations was also included in the amended charter. Mortgage companies will now have to report all contracts and transactions to the MFA, which will record the information on its data base. The data base will also be made available to mortgage companies seeking the information. "We are trying to strike a balance between mortgage finance activities and the players involved in the system, while also keeping a comprehensive data base on all transactions," Torgoman said. A financial auditor responsible for internal monitoring will also be appointed. This auditor will be obliged to report all complaints against the mortgage company, while applying measures to prevent money laundering. Specialised training for real estate appraisers and five years of experience were also stipulated in the charter. The charter also covered the rules and regulations governing mergers and acquisitions of mortgage firms. After signing a protocol with Cairo University to train mortgage experts, the MFA now has 45 appraisers, 23 financial auditors and 180 real estate agents. Company managers like Hala Basyouni of the Al- Masriya mortgage company believe that unregistered units pose the most significant challenge to real estate companies presently operating in the market. "It is almost impossible to find developers who have paid for their land in full and also have their units registered -- these issues make it difficult to appraise the land value," Basyouni said. The MFA has been receiving assistance from US Agency for International Development's Financial Services Project to help it with the organisational structure of the authority as well as mortgage underwriting and appraisals.