MORTGAGE ARRANGEMENT IN DEPRESSED ECONOMY
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MORTGAGE ARRANGEMENT IN DEPRESSED ECONOMY
MORTGAGE ARRANGEMENT IN A DEPRESSED ECONOMY
This research project is a critical examination of the Mortgage Bank of Nigeria.The study was driven by the need to identify Nigeria’s economic depression and mortgage management. This type of banking system has existed since the banking industry is concerned with given loans and advances.
Secondary data were gathered to source the research problem. The data was collected using textbook libraries, professional and trade organisations, and internet services as research instruments.
Following data analysis and interpretation, the following conclusions were reached:
1. The majority of respondents require an interest rate structure.
2. The majority of responders inquired about the payment rate.
3. Loan disbursement and approval
4. It was also discovered that loan rescheduling/foreclosure was taking place.
Based on our observations, we propose that
1. The government should provide sufficient funding.
2. The government and central bank should establish a secondary/intermediate mortgage institution.
3. The central bank should reconsider the interest rate structure.
4. The payment terms should be reconsidered.
The study concludes that the problem of mortgage banks in Nigeria is economic depression. However, if the proposals are taken into account and enhanced, the hidden great potential for the development of mortgage banks in Nigeria would be realised.
INTRODUCTION TO CHAPTER ONE
One distinguishing element of real estate investment is the expenditure of enormous sums of money. As a result, real estate investors rarely fund their projects on their own; instead, they borrow some or all of their capital requirements from financial institutions.
Before making loans, lenders typically want collateral security from their borrowers. This provides a channel for recovering a loan granted to a borrower in the case of a poor business situation or a default by the borrower.
In a mortgage transaction, a mortgage is a person who borrows money with a property as security for the loan, whereas a mortgage is a person who lends money to another under the conditions indicated above.
The mortgage lest is the lest against which the property is produced.
In most cases, a mortgage transaction entails the acquisition of a loan secured by a property interest. The mortgage transfers his personal property to the mortgage in order to demonstrate his willingness to repay a loan and to offer a way for such loans to be recovered indirectly.
The provisions of the mortgage also allow the mortgagee to regain his property after settling his debt. Mortgage transactions occur as a result of a lack of trust and uncertainty in the business sector.
BACKGROUND OF THE STUDY
The term mortgage is derived from the varied modalities of functioning of promises (Walmsely p.56).
In the past, a destor pledged his farmland to a creditor by transferring physical enjoyment to him; if the revenue was sufficient, the loan was repaid immediately; if not, the money for repayment had to be raised separately.
The former was known as a “phle pledge” (mortgage), while the latter was known as a “dead pledge” (mortgage, therefore the phrase “mortgage was formed form dead pledge”) (mortgage),
which represented a circumstance in which the preceding form of a security property could not return the amount borrowed. As a result, the search for alternate means of repayment began.
As the mortgage practise evolved, it became common to transfer the destros land outright to the creditor on the grounds that the destors might redeem it if the debtor defaulted, and the land immediately became the creditors.
The ideas are still in effect today, and they argue that the property serves simply as a security and should thus be relinquished when the loan is repaid.
Due to the current economic situation, there is widespread default in mortgage repayment in Nigeria. To meet their operational costs, lenders resort to auction sales of mortgage securities. This practise, however, is usually contrary to the intentions of most financial institutions in Nigeria due to the negative image it presents of such an enterprise in the eyes of the population.
STATEMENT OF THE PROBLEM
This research project aims to investigate the issue of mortgage arrangements in our economy. The following are the issues that mortgages face:
In our economy, mortgage arrangements are causing complications. The following are the issues that mortgages face:
1. The huge unemployment problem Mortgage defaults are common, as are low productivity and business bankruptcies.
2. Depression on a national or global scale
3. Economic inflation and expensive construction costs.
4. Mortgage commitments are being ignored by borrowers, and there is a widespread downturn in real estate activity.
5. Because activity fails to reach its lowest point during a period of economic downturn
6. Mismanagement and computation on a large scale in the public sector.
7. A lack of foreign currency to cover the house import bills for particular raw goods.
Food imports have increased significantly.
OBJECTIVE OF STUDY
Recognising the importance of mortgage arrangements in our national economic development, the goal of this study is to identify the factors impeding mortgage development in our economy. As a result, the study will conduct the following.
i. Determine the variables that drive mortgage development in our society.
ii. Investigate Nigeria mortgage banking and demonstrate how the economy and policy impede the creation of strong mortgage banks.
iii. Make recommendations for creating an enabling environment for the development of mortgage banking in Nigeria.
THE SIGNIFICANCE OF THE STUDY
This study gives everybody who reads it the opportunity to understand what a mortgage is. There is no gain in claiming that it will provide enormous aid to possible mortgagees through an in-depth investigation of the anticipated challenges that may appear to be a hindrance. And for those who are already operating mortgage banks, another possible solution to their concerns.
As a result, the study serves as a useful reference for future researchers who may like to conduct a similar study. It also informs the federal government about the effects of the economic downturn on our society.
DEFINITION OF TERMS
Mortgage: This is defined as the transfer of the borrower’s legal or equitable interest in property to the lender as security for a loan with a promise to redeem.
Mortgages: Is a Peron who lends money to another under the given conditions?
The mortgage dest: The dest in respect of which the property is created.
Mortgage transaction: A mortgagor is a person who borrows money and uses a property as security for the loan.
Mortgage transactions entail the acquisition of a loan with a security interest in real estate as collateral.
Mortgage transfer: He transfers his real estate to the mortgage to announce his willingness to repay a loan and to offer a way for such loans to be indirectly recovered.
Mortgage terms: The mortgage also allowed him to regain his property after settling his debt.
Lend: It is the practise of banks giving or awarding loans or advances to clients who want to or for his personal investment using his property as securities.
Redemption: The process of returning a loan to the bank that gave it to you on the agreed-upon date.
The person who borrowed the money for his personal purposes is known as the lender.
A mortgagor is someone who grants a mortgagor on his property.
Economic depression: A period of overall downward trend in the business cycle.
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