ABSTRACT

This research work is believed is another contribution to Mortgage Banking literature which will be very useful particularly to future researchers on this topic and those already engaged in the banking industry.
The idea behind this project research work entitled Mortgage banking and contribution to Housing Development in Nigeria is inherent from the crucial and very important nature of housing to every right thinking human being.
Professor Abraham Maslow in his “hierarchy of needs”- a most widely accepted description of human needs of the general population classified food, shelter and clothing as the basic needs of every man. Every human being is born landlord; therefore house ownership is a birthright that must be enjoyed bye very man.
The contributions of mortgage banking to the development of housing in Nigeria cannot be overwhelmed. The federal mortgage bank of Nigeria (FMBN) the primary mortgage Institution (PMLs) and other institutional bodies involved in housing delivery have performed numerous functions in the general effort to provide affordable residential houses for the Nigeria population.
However, a remarkable bottleneck facing the Nigerian housing finance sub-sector is the delay by the apex mortgage institution to disburse the National housing fund loan through the primary Mortgage Institution for on-lending mortgagers. To increase the available housing stock, the apex Bank (FMBN) should ensure the constant supply of loans to Nigerians for the purpose of buying building or improvement of residential houses.
The research study therefore is going to show the actual contributions of mortgage banking to housing development in Nigeria. It will equally show the problems faced by the (PMLS) in their housing finance and delivery effort. In trying to state the problems and prospects the researcher utilized both primary and secondary data. The work is structured in time five distinct chapters and written in simple language to enable readers secure a true picture of the information transmitted. 

CHAPTER ONE

INTRODUCTION
1.0 BACKGROUND OF THE STUDY
The Nigerian Building Society (N.B.S) was established in 1956 as a federal savings schemes for members of the public. Under the popular savings scheme, the saver was required to deposit in the account on initial sum of N5 (five naira) at opening. The save may subsequently deposit in the account as much as he can from time to time. 
The popular saver received interest of four percent on the account and could draw, up to four hundred naira (N400.00) per a month. Larger drawing would required a month notice to the society.
Other special packages were equally handled by the Nigeria Building Society. One important service rendered by the NBS was home purchase mortgage loans.
Under the loan scheme the NBS enabled Nigerians to acquire houses with loans payable over many years up to maximum of twenty (20) years. Applicants who benefited from the loan were expected to immediately bear a small portion of he cost of buildings the house, while repayment at 61/2% interest was spread in such a way that the beneficiary completes the repayment in not later than the age of 55 years. Repayment was usually in monthly installments.
In 1977, the Nigerian Building Society was reconstituted and renamed the Federal Mortgage bank of Nigeria (FMBN). The duty of the federal Mortgage Bank as the sole institution at the federal level for encouraging the flow of funds from various sources to the housing industry through the primary mortgage institutions (PMIS).

1.1 BACKGROUND INFORMATION OF HARVARD TRUST SAVINGS AND LOANS LIMITED
Harvard Trust \savings and loans limited is the result of years of research into the best ways of channeling funds towards the provision of housing needs of every Nigerian.
The Company was incorporated in December 1992 with a mission to set a pace in Mortgage financing. A lot of reasons necessitated for the use of Harvard trust as a case organization. Buying or building a residential house can be one of life’s most stressful experiences. Every right thinking person needs a place to call his own home, a roof over his head.
Harvard Trust is in business to help translate the people’s dreams of funding residential homes to reality. They do this by creating professional innovative and efficient financial engineering environment in which trust and experience are delicately balanced. In other words, they exploit all legitimate and professional means to make tenants become landlords.
STRATEGIC OUTLOOK
The company is emphasizing public trust and dependability as basis for building a sustainable mortgage finance business in Nigeria.
To achieve this, there is emphasis on:
- Solid capital base
- Customer oriented services
- Experienced staff
- Friendliness
- Effective use of modern technology
- And well-informed and versatile board.
It is always seen as the duty of any responsible government anywhere in the world to put in place facilities that will make delivery of decent housing for her citizens easy. It is on the basis of this that the federal government came up with two public bodies crucial to housing matters in the country.
These bodies are: the national council on housing and the housing policy council.
Experience has shown that the greatest problem militating against the effective delivery of a coordinated and sustainable housing system in Nigeria is and has been lack of funds t affordable interest rates. Therefore, the creation and re-organization of the federal mortgage Bank of Nigeria, the activities of the Primary Mortgage institutions (PMIS) the provision of the new National housing Policy an the inauguration of the National Housing Fund (NHF) loan scheme are welcome development geared towards reversing the lack of funds syndrome. It is against this background that the birth of Harvard Trust saving s and loans limited with its headquarters at no 2 Red cross way, opposite main market, Enugu is a good step in the right direction.
Delivery style
The concept of Harvard Trust was born out to find solutions to the problem of channeling funds for individual and corporate housing needs, thereby contributing to the housing development of Nigeria.
To this end, the company addressed some vital issues which are fundamental to the sustenance of viable mortgage institutions.
These amongst others include: 
(a) Capital Base:
The first one is capital base. Adequate capital is sine-qua-non in mortgage financing the company was established with an authorized and paid-up capital of N20 million (Twenty million Naira). However, the company has reached advanced stage to increase this amount to N50 million (fifty million naira) in the very near future. So, equity capital is the corner-stone of Harvard Trust savings and loans limited.
(b) Liquidity:
Another paramount issue is that of liquidity. It is the policy of the bank to ensure that liquid cash will always exceed customers deposit at any point in time. This ensures that customers are paid as soon as they make demands. The liquidity of the bank indicates the number of times current assets cover its current liabilities. It equally tells the ability of the bank to meet with short-term liabilities by liquidating short-term assets the excess of current assets over current liabilities.
It was seen that Harvard Trust is quite liquid following the fact that it has sufficient cash and other liquid assets plus the ability to raise funs quickly from other sources. This enables it to meet it payment obligation and financial commitment in a timely manner. There is equally sufficient liquidity buffer to meet almost any financial emergency.
Also observed was the fact that the management of Harvard Trust is always concerned with how much liquidity to hold and in what form to hold it. To obtain a realistic appraisal of the bank’s liquidity position, the management make use of an accurate forecast of cash needs and the expected level of liquid assets and cash receipts over a given time period.
The management deducted the following as reasons for constant liquidity.
- It prevents the bank form resorting to a fire sale of assets.

- It enables Harvard Trust to continue to do business while others are closing.
- It prevents the bank from going to the money market when conditions are not conducive for that
- It protects the bank going to the FMBN’s discount window to borrow.
(c) Experienced Staff:
Again Harvard Trust takes cognizance of the quality and experience of staff they engage. It is structured into proactive, dynamic units with unique responses to make demands and pressures in the area of product and service origination, administration and marketing. This makes the bank alert to challenges that great industry. Board membership
Moreover, the board is composed of seasoned and tested professionals of proven integrity and transparent honesty with enviable track records that cut across law, economics, Banking, accounting Engineering, Architecture, Administration and Business.
The company is organized to meet today’s mortgage banking service delivery and automated, fast and courteous service to customers driven by young and efficient professionals. 
(d) Products and Services on offer
At Harvard Trust, there is something for everyone especially the main in the street. These services include:
LOANS AND ADVANCES
- Refurbishment loan
- Housing Development loan
- Mortgage service loan
- Owner-occupier flats services loan
- Stop-Gap Advances
- Staff Quarter loan, Housing fund loan
SAVINGS
- General savings
- Occasional savings
- Scholarship savings
- Mortgage savings
- Harvard mortgage
- Retirement scheme cash points, staff Housing Scheme.
DEPOSITS
- Trust Certificate
- Cold deposit
- Trust Investment
- Call Account
- Fixed Account
CONSULTANCY
- Loan redemption
- Loan syndication
- Project management
- Title Investigation and perfection

1.2 STATEMENT OF PROBLEM
Shelter has been universally accepted as the second most important essential human need after food. Housing in all its ramification, is more than shelter since it embraces all social services and utilities that go to make community a neighbourhood a livable environment.
The problems of housing in Nigeria are enormous and exhibit apparent and marked reginal difference. In most of our urban center, the problem is not only restricted to quantity but also the poor quality of available housing units and the environment.
The scenario is only slightly different in the rural areas where the problem is primarily that of quality of housing and inadequate infrastructural facilities like roads, drawings, water supply and so on.
From vailable statistics, the magnitude of housing problem in the urban areas of the country is such that five million new housing units will be required to meet existing and future needs up to the yer 2010 A.D.
The housing situation in the rural areas of the country reside is ever more satisfactory. Available statistics show that about thirty-two million (32 million) new housing units are required to meet the housing needs in the rural area of Nigeria by the year 2010 A.D. However, it is observed that the housing problem in the rural areas is mainly that of qualitative improvement in terms of sanitation and infrastructure for existing housing stock in these areas.
The amount of the essential services may be approximated to new housing need of the areas to some eight million housing units.
At this juncture, one would like to know if the current increase in mortgage banking business is actually contributing to the housing development in Nigeria.
Again, one would like to know the type of person that can apply for the National housing fund loan and what the purpose of the loan is like.
Following the high cost of building or purchasing a residential house/home, people may like to ascertain the maximum limit loanable under the National Housing fund Scheme.
Equally, information s to how the loan is repaid will be beneficial to potential mortgagers and readers alike.
It will be interesting equally to indicate the extent reached by various levels of government in contribution to the housing development of Nigeria.
The contributions made so far by the FMBN towards housing delivery in Nigeria shall be examined and besides the relevance of the national Housing policy towards the development of housing in the country shall be analysed.
Finally, this work will reveal other information a reader or a potential mortgage may inquire for in the general mortgage business in Nigeria.

1.3 PURPOSE/OBJECTIVE OF THE STUDY
In setting the goal and objectives of this study, the goals and objectives of the National Housing Policy must be recalled.
The goal is made to be concise achievable and acceptable to the general populace. It includes a time frame or target date in relation to which adequate evaluation of performance or lack of it could be made.
Considering that Nigeria cannot isolate itself from the international community, the goal of the national Housing Policy reflects the United nations Resolution which calls for shelter for all by the year 2010 A.D. However, the ultimate goal of the national Housing Policy is to ensure that all Nigerians own or have access to decent housing accommodation at affordable cost by the year 2010 A.D.
In an attempt to achieve this goal government gears towards the attainment of the following policy objectives:
(a) To encourage and promote active participation in housing development by all tiers of government and the private sector.
(b) To strengthen institutions within the system to render operations more responsive to mortgage demand.
(c) To emphasize hosing investment which satisfy basic needs.
(d) To encourage greater participation by private sector in housing delivery especially through the primary mortgage institutions.
Meanwhile the objectives of this study are as follows:
- To measure the relevance of government ad mortgage Houses towards the development of housing in Nigeria.
- To expose readers and prospective mortgagers to the effort made by the government and Harvard trust in solving housing problems in Nigeria.
- To acquaint readers as to who are qualified to apply for the NHF loan.
- To educate potential mortgagers and readers on lthetype(s) of security needed for the procurement of the NHF loan.
- To expose readers to the interest rate payable on the loan and the applicable repayment procedure.
- To acquaint readers with further details they would need to know regarding the efforts made by mortgage banks in general and Harvard Trust in particular towards housing development in Nigeria.

1.4 RESEARCH QUESTIONS
The research questions here would serve as guide in the search for the solution to research problem. As a map that guides this work, the following research questions call to mind:
- Do you think that the incorporation and activities of your establishment has helped to alleviate the problems of shortage of housing in Nigeria?
- Has there been an increase in your bank’s deposit since the inception of the national Housing found loan Scheme?
- Would you attribute the increase to the launching of the new national housing Policy?
- To what extent have people applied for NHF loan through your mortgage bank?
- Has the non- disbursement of the NHF loan by the Federal Mortgage bank of Nigeria (FMBN) for on lending through the primary mortgage banks like yours negatively affected the mortgage hopes and aspirations of building or buying their own residential houses before the year 2010 A.D.?
- Has your bank enhance facilities to absorb the expected rush by applicants in the event of the on-coming disbursement of national housing fund loans?
- Has the hopes and aspirations of Nigeria towards building or buying their own houses through primary mortgage banks like your actually made work at your bank more burdensome?

1.5 RESEARCH HYPOTHESES
A critical analysis and review of the problem associated with the mortgage banking and contributions to housing development in Nigeria have led to these hypothesis which will be tested in the course of this research.
1. Hi: building houses through mortgage banks make banking work more burdensome.
Ho: Building houses though mortgage banks does not make banking work more burdensome.
2. Hi: the main objective of national Housing Fund is to alleviate the housing problems in Nigeria.
Ho: The main objective of national Housing fund are not to alleviate the housing problems in Nigeria.
3. Ho: Since the inception of national housing fund there has been an increase in bank deposits.
Hi: Since the inception of national Housing Fund there has not been an increase in bank deposits.

1.6 SIGNIFICANCE OF THE STUDY
This work will be great use to varying group of people. The result or findings of this research work will benefit the following group of people:
- Nigerians in need of residential houses
- The case organization (Harvard Trust)
- The government at different levels and
- The reading public alike.

1.7 DEFINITIONS OF TERMS
(a) Mortgage
A mortgage is an agreement in which money is lent by a building society, a bank or so for buying a house or other property, the property being the security. The document containing the particulars of this transaction is called mortgage Agreement or mortgage Deed.
Sometimes, the term mortgage is descriptive the sum of money payable monthly under the transaction. Also you can speak of mortgaging something. When used this way, mortgage then mean to give somebody the legal right to take possession of (a house or some other property) as a security for payment of money lent.
(b) Mortgage
A mortgage is a person or firm that lends money in a mortgage agreement.
(c) Mortgage
A mortgage is one who borrows money in a mortgage agreement. However, if you are speaking literally, (as opposed to legal use) you can use the term mortgager for mortgager. Mortgage of lend may either be 
- Legal
- Equitable
(i) Legal Mortgage
A mortgage is legal when it vests the estate in the mortgage with qualification for recoverance on repayment. That is the lender has title to the property until the mortgage is repaid, when title reverts bank to the borrower.
(ii) Equitable Mortgage
A mortgage is termed equitable when title deeds are deposited with the lender but interest in the title does not pass per se.
(d) Issues worthy of |note mortgage transactions
(i) A mortgage family land by ammeter who has improved on it is void in law. ADAGU V FABBOZA (1952) HNLR II0. He can only mortgage his portion after due partitioning
(ii) A mortgage property cannot be sold until mortgage deed is registered. However the registration of mortgage deed can be done at anytime provided the mortgage pays penalty for late registration. ANUKWU V STANDARD BANK (1972) ULR 106.

(iii) You cannot prevent a mortgage from redeeming the mortgage at any time he deems fit provided he pays back the borrowed sum plus related interest.
(iv) the mortgage can foreclose and sell the property if the mortgager fails to perform his part of the contract.
(v) Once the mortgage’s power to sell becomes due, he does not required the assistance of the court to sell the mortgaged property as long as the right is exercised in good faith. 
EKE-ITEH V NIGERIA HOUSING DEVELOPMENT SOCIETY (1973) SC. 183. Act 193, 202.
(e) Federal Mortgage bank of Nigeria (FMBN)
This is the mortgage bankers bank sponsored by the Federal government. It was established in 1977 with an authorized and paid- up capital of N150 million. If functions as the sole institution at the federal level for encouraging the flow of funds from various sources to the housing industry through the primary mortgage institutions.
(f) Primary Mortgage Institutions (PMIs)
They are the other institutional components of the finance market in terms of mortgages. They include: the Mortgage Banks, Building societies etc.