Mortgage market development in mongolia issues and challenges
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MONGOLIAN MORTGAGE CORPORATION. Regional Symposium on Pro-Poor Housing Finance i n Asia and Pacific ,. MORTGAGE MARKET DEVELOPMENT IN MONGOLIA ISSUES AND CHALLENGES. Ts.Enkhbayar CEO [email protected] New Delhi, India 2010 .04. 1 9. Content .

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MORTGAGE MARKET DEVELOPMENT IN MONGOLIA ISSUES AND CHALLENGES

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Mortgage market development in mongolia issues and challenges

  • MONGOLIAN MORTGAGE CORPORATION

Regional

Symposium

on Pro-Poor

Housing Finance

in Asia and Pacific,

MORTGAGE MARKET DEVELOPMENT IN MONGOLIA ISSUES AND CHALLENGES

Ts.Enkhbayar

CEO

[email protected]

New Delhi, India

2010.04.19


Content

Content

  • Housing finance system development process

  • Mortgage market overview

  • Status of conditions on mortgage market development

  • MIK performance , issues and challenges


Housing finance system development overview

Housing finance system development overview


Housing areas

Housing Areas:

70%- population

59%- UB

80-90% provincial towns

Serviced apartment area

Ger area

Planning –proper ,

Water supply – central system

Sewage – central system

Heating – central system

Electricity – central system

Social infrastructure –sufficient

Apartment ownership –yes

Housing finance – mortgage loans, savings

Planning – not proper

Water supply – kiosks (potable)

Sewage – pit latrine

Heating – stove using coal and wood

Electricity – yes

Social infrastructure – not sufficient

Land ownership –yes

Housing finance – savings, assistance from relatives and friends, loans


Mortgage market development in mongolia issues and challenges

Mortgage market overview

2009.12.31


Shareholders

Shareholders

Main Goal

Promotion and development of primary and secondary mortgage markets by raising medium to long term funds on domestic and foreign capital market through a series of capital market tools to create and ensure s smooth functioning of long-term financing system to promote affordable home ownership and urban development for Mongolia’s people.

Established 06.09.2006


Mortgage market development in mongolia issues and challenges

Mortgage market activity

Borrower

Mortgage Bonds

Lender

Commercial Bank

loans

Secondary Mortgage Market Institution

INVESTOR (International, Domestic )

Loan

Funding

Funding

2 major role

i) market development driver I

i) Pioneering SMM


Mortgage market development in mongolia issues and challenges

MONGOLIAN MORTGAGE CORPORATION

Shareholders

Board Members

Legal & Audit Committee

Financial Committee

Operational Committee

Risk Committee

CEO

Finance and Investment Division

(Senior finance officer, Accountant, Assistant Accountant)

Risk Management Division

(Risk management officer)

Internal operation Division

(IT, Layer, Cooperation officer, Administration & HR officer)

Asset management and Securitization Division

(Asset management officer, Securitization officer)


Reason why we established mik

Reason why we established MIK

  • Increase the affordability of the housing loan

  • Stable structure for long term financing

  • Increase in housing mortgage market

  • Need for capital market development

  • Liquidity facility


Mortgage market development in mongolia issues and challenges

МIK OPERATION

16% - PWR

84% - PWOR

Dec 2009 swapped MIK bond with mortgage pool


Development phases

DEVELOPMENT PHASES


Phased development approach

Phased Development Approach


Issues to be done for developing efficient mortgage market development

Issues to be done for developing efficient mortgage market development


Mik progress

MIK Progress


Learning

learning

  • Play dual role

    • Driven force of setting up Mortgage market development as well as capital market

      • (laws, regulations, policy framework, financial infrastructure, capacity building, workshops, RTD, lobbying, etc)

    • Acting as secondary mortgage institution

      • Purchasing pools from banks, warehousing m issuing bonds and selling investors etc

      • Institutional strengthening and capacity building


Issues and challenges

ISSUES AND CHALLENGES

  • Implementation of laws and regulations recently approved

  • Economic stability

  • Different Understanding of mortgage issues

  • Standardized and documented origination and servicing

  • Low affordability rate

  • Local rating agency

  • Inappropriate Professional appraisal

  • Title and Lien registration, enforcement

  • Balance sheet treatment with recourse based loan pools and bonds

  • Bankruptcy remote vehicles

  • Tax and accounting guidelines

  • IT infrastructure AM

  • Credit scoring

  • Mortgage insurance

  • Mortgage guarantee program


What is next

What is next?

  • Improve accessibility housing loans to LIHs

    • Housing micro finance study,

    • Guarantee program with international orgs.

  • ABS , SS laws and related regulations, by laws

  • Issue bonds to domestic and international market

  • Expanding cooperation

    • Network meeting in Mongolia APHFU

    • Intensive development of mining industry –coal mining, copper mining, gold etc and


Thank you

THANK YOU

  • Mongolian Mortgage Corporation LLC /MIK/

  • MIK Building , United Nations street-38

  • Chingeltei district-4, 15160

  • Ulaabaatar, Mongolia

  • www.mik.mn, [email protected]

  • Tel: (976) 11-328267

  • Fax (976) 11-313338


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