FMBN indicts mortgage banks, developers over unremitted funds

Acting Managing Director/CEO, FMBN, Richard Esin and EFCC Chairman, Ibrahim Magu.

Acting Managing Director/CEO, FMBN, Richard Esin and EFCC Chairman, Ibrahim Magu.

With the economy sliding to recession, the apex mortgage firm has braced up on lending standards to ensure early recovery of the housing market.

The Federal Mortgage Bank of Nigeria (FMBN) has also moved to ensure the Economic and Financial Crimes Commission (EFCC) recovered misappropriated contributory funds under the National Housing Fund (NHF).

Towards this end, the Acting Managing Director/CEO, Richard Esin has began talks with the investigatory and prosecuting government agency and requested the help of the EFCC to recover of its huge bad debts from developers and others, who obtained housing loans from it, but misappropriated the fund.

He made the request when he paid a courtesy visit to the chairman of the commission, Ibrahim Magu, in Abuja. Esin informed the anti-graft boss that, but for the resilience of the bank, it would have been unable to meet the financial requests of thousands of Nigerians, including staffers of the EFCC because of defaulters.

He disclosed that the concerned developers have a huge debt overhang with the bank, saying that they obtained construction finance loans from the bank to build estates, but diverted the funds into other non-productive and non-regenerative activities. According to him, some developers completed the estates, sold the housing units and failed to remit the sales proceeds to the bank.

Esin said some Primary Mortgage Banks, which obtained funds from the bank for Mortgage Finances, for on lending to qualified NHF contributors, declined to disburse the funds to the applicants. Besides, there were those, who obtained equity contribution from would-be mortgagors, but refused to deploy it in the provision of mortgage finances to the applicants’ benefit.

Esin expressed the worry that despite the revocation of their operational licenses, some Primary Mortgage Bank (PMB) operators are still deceptively encouraging innocent and unsuspecting mortgagors to continue to repay their mortgages to them through fictitious accounts with no intention of remitting it to FMBN.

He appealed to Magu to assist in the recovery of bank funds from contractors and vendors, who were mobilised to execute various contracts for the bank but failed to execute it and misappropriated the bank’s money. “These activities are fraudulent, and constitute financial crimes. We, therefore, seek the EFCC’s kind assistance in the recovery of these funds, which belong to the Nigerian workers.”

Esin informed Magu that his management remained committed to helping the staffers of the commission own houses, noting that after the historic MoU between both organisations, the FMBN has disbursed N3 billion in 10 batches to 156 staffers of the EFCC.

The FMBN has packaged N1.6 billion worth of National Housing Fund loans for 113 staffers of EFCC. The loan is currently awaiting board approval, while N1.3 billion has been approved as NHF loans for EFCC staffers but not disbursed because the targeted houses are no longer available.

His words: “FMBN will work with other interested PMBs to revive the scheme once they are able to provide the bank with a suitable and acceptable security.”

He assured the EFCC Chairman that the FMBN was in support of the war against corruption, hinged on one of the four pillars of the bank’s self-reinvention journey of corporate governance restoration, starting with a corporate governance audit of FMBN and staff training for over 120 members of staff in the leadership cadre, by the BPP on procurement practices and processes to engender the right kind of ethical behaviour among the staffers.

He also informed Magu about the establishment of a vibrant Anti-Corruption and Transparency Unit (ACTU) in the bank and training of over 120 members of staff in the leadership cadre by staffers of Independent Corrupt Practices Commission (ICPC) on anti-Corruption programmes.

The FMBN, under Esin, has also brought into operation, the globally acclaimed Anti-Money Laundering and Combating of Terrorism Financing Manual, which would serve as key guide in driving “our operations and the management of all facets of its relationships with stakeholders”.

“We have also redefined our business to sharply focus on the low and middle-income earners, collaborating with credible developers to deliver affordable houses at not more than N5 million per unit, to enable us achieve the required spread among NHF contributors in the delivery of mortgages. Our goal is to make affordable mortgages, a veritable tool in the fight against corruption,” Esin told Magu.

He continued: “We have introduced the FMBN Home Renovation Loan for interested contributors desirous of renovating their homes via home expansion and other forms of value-enhancement. We will encourage members of staff of EFCC to take advantage of these opportunities for their benefit,” the FMBN Acting Managing Director added.

The FMBN, under Esin, has been expanding and coordinating mortgage lending on a nation-wide basis, and is also promoting affordable housing to ensure that 17 million housing deficits, estimated to cost N59.5 trillion, is addressed.

It was the FMBN that started the management and administration of the contributory savings scheme known as the National Housing Fund (NHF), which enabled it mobilise long-term funds from Nigerian workers, banks, insurance companies and the Federal Government to advance loans at soft interest rates to contributors.

The FMBN finances mortgages created by primary mortgage institutions (PMI) under the NHF scheme, and also give estate development loans (EDL) to real estate developers.

The new FMBN boss understands that achieving set objectives would require the collaboration and support of the Economic and Financial Crimes Commission (EFFC) to recover FMBN cash in the hands of developers, who collected funds but failed to deliver on agreed projects.

Sources at the Mortgage Bank of Nigeria (MBAN) in reaction, said that the association has waded into the affairs of some members owing the apex body and the issues have been sorted out while other matters are being thrashed out between them.

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