Egypt's PM, JICA chief discuss boosting investment, education ties at TICAD 9    Egyptian pound wavers vs. USD in early trade    SCZONE showcases investment opportunities to eight Japanese companies    Egypt urges Israel to accept Gaza deal amid intensifying fighting    Egypt, ADIB explore strategic partnership in digital healthcare, investment    Egypt's PM meets Tokyo governor, witnesses signing of education agreements    Egypt welcomes international efforts for peace in Ukraine    Al-Sisi, Macron reaffirm strategic partnership, coordinate on Gaza crisis    Egypt's Sisi, France's Macron discuss Gaza ceasefire efforts in phone call    Contact Reports Strong 1H-2025 on Financing, Insurance Gains    Egypt, India's BDR Group in talks to establish biologics, cancer drug facility    AUC graduates first cohort of film industry business certificate    Egypt to tighten waste rules, cut rice straw fees to curb pollution    Egypt recovers collection of ancient artefacts from Netherlands    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egyptian, Ugandan Presidents open business forum to boost trade    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt to inaugurate Grand Egyptian Museum on 1 November    Egypt's Sisi: Egypt is gateway for aid to Gaza, not displacement    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Mortgages on the increase
Published in Daily News Egypt on 03 - 06 - 2006

Reforms to improve mortgage process designed to boost investments
CAIRO: By March 2006, 490 mortgage loans worth a total of LE 178 million had been granted by the two sole mortgage finance companies in Egypt, Al-Taamir and Al-Masria, according to the Ministry of Investment. Mortgage loans granted by banks also increased, amounting to LE 125 million since banks started financing mortgages.
Despite the passing of the mortgage finance law in 2001, designed to facilitate growth in the real estate market and the mortgage finance industry and transform it into the next booming sector in the market, it had failed to do so until recently.
Since the establishment of the law, Al-Taamir and Al-Masria have made only a handful of loans. This can be attributed to a weathered mortgage system in dire need of an overhaul. For one, the industry lacked an expert labor force, including loan officers and appraisers. The process of real estate registration, the heart of mortgage financing, was also complicated, expensive and long, reflected in the fact that in 2005, 80 percent of real estate property in Egypt was not registered. Land registration is a vital issue, since land registration is the strongest guarantee for financial lenders in the case of investor default.
In the last two years, the Ministries of Investment and Finance, together with the Central Bank of Egypt (CBE) and the Mortgage Finance Authority, have tackled the challenges that have stopped the market from shaping up. Official registration fees have been reduced to three percent, banks and non-banks are now allowed to issue mortgages using their own set of rules to define the borrower's income, and for the first time under Egyptian law, a clear set of procedures for the foreclosure on property of defaulting debtors has been inked. Mortgage finance is also set to expand to include buying lands and developing real estate.
In order to address the scarcity of long-term financing for homeowners in the country, the Egyptian Housing Finance Company, the first privately owned specialized housing finance company in Egypt was established in 2004, providing long-term loans for housing investments, especially those in the middle-income bracket.
The Ministries of Housing and Finance are reportedly addressing the concept of long-term mortgages to reduce costs for low-income families. Initially, the creation of the mortgage law was designed to do more than just facilitate and smooth out the knots in the mortgage financing and real estate sectors. In fact, the law is supposed to protect the mortgage lender against default by allowing for the eviction of home-buyers who fail to keep up with their mortgage payments.
Fans of the law also saw it as the beginning of modest housing developments geared toward first-time homeowners, usually middle and low-income families who hold no property under their names.
The establishment of a mortgage refinancing company should be launched soon, according to the Ministry of Investment. This joint stock company, which will be formed by mortgage financing entities, will have a paid-in capital of LE 200 million with a 20 percent stake held by CBE.
At a meeting last Wednesday between the head of the Mortgage Finance Authority, Osama Saleh, and the deputy governor of CBE, Tarek Amer, and Minister of Investment Mahmoud Mohieddin, the development of the mortgage finance secondary market was discussed, according to a statement issued by the ministry.
Mortgage finance procedural developments and legal amendments to reduce registration fees were also reviewed at the meeting and will be introduced through a decree by the Minister of Justice.


Clic here to read the story from its source.