FRA approves legislative amendments to set up new database for mortgages
Mortgaged properties yet to be added to the national real estate registry are going to be logged on a new temporary database held by the Financial Regulatory Authority (FRA) under amendments to the Mortgage Finance Act greenlit yesterday, FRA boss Mohamed Omran said in a statement (pdf). Any agreement between a mortgage lender and borrower will be added to this electronic log until the lender completes steps required to officially register the property under its name, Omran said.
Why the move? This aims to protect the rights of mortgage lenders, who face a lack of clarity when it comes to proving that they own the underlying property. The changes will also allow rights-to-use a mortgaged property to be inherited. They still need to be tabled to the House of Representatives for a final vote.
Background: The 20-year old Mortgage Finance Act, which was signed into law back in 2001 and aimed to encourage mortgage lending in Egypt, hasn’t been amended since. Its implementation on the ground showed several shortcomings, particularly in how it regulates registering mortgages, the FRA said yesterday. The mortgage financing market more than doubled to EGP 3.4 bn since 2017, driven by subsidized mortgage lending initiatives launched by the Central Bank of Egypt in recent years, and recently expanded considerably.