An evaluation of the problems and prospects of mortgage banking in nigeria (a study of federal mortgage bank)

Description

ABSTRACT

This research presents an evaluation of the problems and prospects of mortgage banks. Federal mortgage bank is the case study chosen by researcher on which the research is to be carried out. Mortgage bank is faced with serious problems and these problems are growing at an alarming rate for the purpose of this project critical analysis of these problems is needed and likely solution to the problem should not be left untouched. This research work will basically treat this topic as related to the impact of mortgage bank in housing delivery in Nigeria; also the remedies of the mortgage against mortgage personally shall be mentioned in the research work. In developing countries among important factors influencing housing provision, finance is one of the most critical. This is the case with Nigeria and in particular in large urban centers of which lagos is one. The study is therefore an investigation on the structure and challenges confronting housing finance efforts of primary mortgage institutions in Nigeria. The research objectives include the examination of housing delivery policies and finance in Nigeria. The study also examines the structure of primary mortgage institutions (PMIS) in the study area, housing funding products and strategies by the primary mortgage institutions and investigated the problems and challenges confronting the operations of the Primary mortgage institutions in Nigeria. The methodology employed by the research includes the collection of primary and secondary data. Field survey showed that 65 primary mortgage institutions operate and are active as at the time of field work and 16 representing 25% were picked for sampling through oral discussion and questionnaire administration to the bank officials and customers, with 160 questionnaires for the latter. Data obtained were analyzed through simple frequency distribution table.

TABLE OF CONTENT

Cover page………………………………………………………………………………….i

Certification………………………………………………………………………………..ii

Dedication……………………………………………………………………………………iii

Acknowledgement………………………………………………………………………iv

Abstract …………………………………………………………………………………….  v

Table of content………………………………………………………………………vi-vii

CHAPTER ONE

• Introduction…………………………………………………………………………….1

1.1 Background of the study………………………………………………………..1

1.2 Statement of the problem………………………………………………………2

1.3 Objective of the study…………………………………………………………….2

1.4 Research questions………………………………………………………………..3

1.5  Statement of hypothesis……………………………………………………….3

1.6   Scope of the study………………………………………………………………..3

1.7    significance of the study……………………………………………………..3

1.8   limitation of the study………………………………………………………….4

1.9   Definition of terms……………………………………………………………4-5

 CHAPTER TWO

• Literature review……………………………………………………………………..6

2.1 Historical development……………………………………………………….6-7

2.2 Primary mortgage institutions……………………………………………..7-9

2.3 Housing corporations………………………………………………………….9-10

• The challenges of mortgage banking in Nigeria……………11-12

2.5 Prospects of mortgage banking in Nigeria………………………12-13

2.6 Development of mortgage finance system in Nigeria…….13-17

2.7 Deposit money and merchant banks…………………………………..17

2.7.1 Insurance companies……………………………………………………….18

CHAPTER THREE

3.0   Research methodology………………………………………………..19-21

3.1 analysis of primary mortgage institutions response to field survey…………………………………………………………………………………..21-29

CHAPTER FOUR

4.0 Result and discussion…………………………………………………..……….30

4.1 analysis of customers response to field survey questionnaires…………………………………………………………………………30-35

CHAPTER FIVE

5.0 Summary, conclusion and findings………………………………………36

5.1 Summary…………………………………………………………………………36-39

5.2 Conclusion………………………………………………………………………39-40

5.3 Recommendations………………………………………………………………40

Bibliography

CHAPTER ONE

• INTRODUCTION
  • BACKGROUND OF THE STUDY

Mortgage banking is the mobilization of financial resources from surplus unit in the economy for financing housing participants. In mortgage banking only mortgage finance intermediaries (mortgage banks or institutions) specialized in mortgage asset creation. They provide loans to mortgager while the mortgages give mortgages usually legal mortgage to the primary mortgage banks.

Mortgage institutions are bodies or organizations allowed to collect saving & deposit for creating mortgage assets by any definition they are banks, mortgage institutions include savings and loans companies, building societies and others which specialize in financial intermediation for housing development.

According to Osamwonyi (1993) the act of arranging and packaging mortgages could be regarded as mortgage. The range of property used as collateral here goes beyond land. The loan can be used for anything on earth as opposed to housing acquisition. Today mortgage finance as a major area of banking specialization now refers to arranging and packaging of mortgages collateralized by real estate and the loan employed for real estate acquisition.

• STATEMENT OF THE PROBLEM

Mortgage banks have been experiencing problems since its inception. The affects the performance and profitability of banks and may possibly lead to distress. The inability to identify the immediate and remove causes of continuous cases of these problems in virtually all mortgage banks in Nigeria.

Fraud is the major challenges to the entire banking industry. One of the most fundamental difficulties mortgage banks in Nigeria have is near absence of basic infrastructure, high cost of building materials, bureaucratic and costly land administration.

1.3    OBJECTIVE OF THE STUDY

The general objective of this study is to evaluate the problems and prospect of mortgage banking in Nigeria but the general objective of this study are:

1. To identify the causes of the problems of mortgage banking in Nigeria
2. To identify the prospects of mortgage in Nigeria
3. To examine the efforts of government and its agencies in the prevention and control of the problems of mortgage banking in Nigeria.
4. To examine the extent to which environmental or social factors contributed to mortgage banking in Nigeria.

• RESEARCH QUESTIONS

The following research questions guided this study

1. What are the actual causes of the problems of mortgage banking in Nigeria?
2. What are the efforts of government and its agencies on mortgage banking problems in Nigeria?
3. What constitutes environmental or social factors of mortgage banking in Nigeria?

1.5     STATEMENT OF HYPOTHESIS

Ho: Mortgage banks have not contributed to social and environmental factors.

HI:  Mortgage banks have contributed to social and environmental factors.

1.6   SCOPE OF THE STUDY

This study centers on the evaluation of the problems and prospects of mortgage banking in Nigeria with a keen interest on federal mortgage bank.

1.7    SIGNIFICANCE OF THE STUDY

The findings of the study will provide an input to the government in the formulation of laws on the financial services industry. The study will uncover and bring the important role being played by mortgage banks in Nigeria.    Furthermore, it will be of much use to students who are undertaking research work on similar issue. It may serve as a reference for them and also for students studying courses in finance.

1.8   LIMITATION OF THE STUDY

The truth remains that finance the student has is not enough to finance this research work, the time available is not enough to go for further research, even data are not adequate enough to process this research.

Similarly, the unwillingness of the respondent to take the necessary pains in completing the questionnaire also affected the progress lack of relevant text books for the studies were also a setback.

1.9   DEFINITION OF TERMS

Mortgage:  A special form of secured loan where the purpose of the loan must be specified to the lender, to purchase assets that must be fixed.

Loan: is a debt provided by one entity or organization or individual to another at an interest rate, by a note which specifies among other things the principal amount interest rate and date of repayment.

Overdraft: is a deficit in a bank account caused by drawing more money than the account holds.

Collateral: is something or asset pledged as security for

repayment of a loan to be forfeited in the event of a default.

Security; is the state of being free from danger or threat or protection of persons, organizations or country against danger or risk.

Assets: refers to competing valuable that an entity owns,

benefits from, or has use of in generating income.

Liabilities: refers to a state of being legally responsible for something.