MWFL Prefinancing Process
1) Mortgage Banks Originate Mortgage Loans
At this phase, the participating Member Mortgage Banks (MMBs) assess prospective homeowners and book mortgage loans they intend to fund in advance of closing such mortgage loans. The process of conducting an assessment of the loans will run up to a cut-off date which is the end of the Origination period in line with the applicable MWFL prefinancing timeline for the specific round of funding.
2) Participating MMBs Submit Funding Request to MWFL
After aggregating the principal sum of all loans booked, the participating MMBs will send a request for prefinancing to MWFL. MWFL will fund a maximum of 80% of the aggregate loan amount booked (or a maximum of 64% of the Property Value) pursuant to the Master Purchase, Prefinance and Servicing Agreement (MPPSA).
All submissions of funding requests must be supported by all relevant pre-funding documentation for each mortgage loan booked in the proposed mortgage pool. The participating MMBs will also submit a Mortgagor Factsheet which will contain details of the mortgagor and the mortgaged property along with an executed undertaking in respect of the information provided in the Mortgagor Factsheet which will indicate that each criterion under the NMRC Uniform Underwriting Standards has been complied with in creating each of the mortgage loans in the submitted portfolio.
3) MWFL Reviews Mortgage Portfolio Submitted by Participating MMBs
Upon receipt of pre-funding documents from all participating MMBs, MWFL will review the Mortgagor Factsheets and all the pre-funding documents submitted for conformity with the NMRC UUS. Upon satisfactory review of all required pre-funding documents, MWFL will issue qualifying MMBs with conditional approval of the funding request. MWFL will also conduct site visitation on randomly selected properties to be prefinanced from time to time.
4) MWFL Forwards Mortgage Portfolio Documents and Other Information to NMRC for Review & Approval
Whilst still conducting its review of the pre-funding documents received from the participating MMBs, MWFL will forward the documents to NMRC for their review and subsequent approval. NMRC has sixty (60) working days to review the mortgage portfolio documents and approve same. Any non-conforming loans within the pool (if any) will be identified and sent to the relevant MMBs to substitute affected the loan(s) with eligible loan(s).
5) MWFL Issues Commercial Papers to Finance Participating MMBs Funding Request
MWFL issues Commercial Papers (CPs) to money market investors equal to the aggregate funding request amount of the participating MMBs in the applicable prefinancing round.
6) MWFL Prefinances Participating MMBs
Upon the successful CP issuance, MWFL will provide all participating MMBs with their respective funding requests after all conditions precedent to prefinancing have been met, and all required pre-financing loan documentation have been completed, submitted, reviewed, and found acceptable. All prefinancing facilities provided by MWFL will be in strict adherence to its collateralisation policy as contained in both the MPPSA and MWFL Credit Policy Manual.
7) Participating MMBs Fund the Home Borrower
Upon receipt of the funding from MWFL, each participating MMB will close all the prequalified Eligible Mortgage Loans, after which all post-funding documents as required in accordance with the MPPSA are sent to MWFL. Both MWFL and the participating MMBs will assemble all post-prefinancing documentation in respect of the eligible mortgage loan portfolio and deliver to NMRC within 14 days post-prefinancing, for commencement of final due diligence in readiness for refinancing at the end of the minimum six (6) month seasoning period.
The Uniform Underwriting Standards outlines the standards under which a mortgage loan underwritten by a member mortgage lending institution of the NMRC will be eligible for refinancing by the NMRC.
The goal of the NMRC Uniform Underwriting Standards is to:
- Promulgate mortgage lending standards and procedures within the Nigerian mortgage market, thereby facilitating improved access to housing finance; and
- Develop and promulgate the criteria for acceptable prime mortgage loans, including payment performance, financial terms, legal contract terms, mortgage loan product designs, mortgage loan underwriting criteria, and the contents of mortgage loan documents.
Lending standards promote efficiency and mitigate the legal and operational risks inherent in mortgage lending by ensuring quality collateral, adequate property title, proper registration, enforcement of legal mortgages, and maintenance of efficient collection processes.
The NMRC UUS is subject to change and review