Ghana home loans to pioneer mortgage security

The Ghana Home Loans (GHL), a provider of residential mortgages, has announced its intention to play a pioneering role in the creation of a local mortgage backed securities market.

A statement signed by Michael Obeng, GHL Business Development Analyst, and copied to the Ghana News Agency in Accra on Thursday, said the monthly mortgage payments made by home owners are aggregated by the issuer and used to pay investors in the mortgage backed securitisation for a pre-agreed duration.

“Investors in this asset class are typically pension funds, insurance companies, high net worth individuals and other institutions with long term investment horizons and an ability to assess the credit quality of the issuance,” the statement said.

It said mortgage backed securities would allow issuers to diversify their financing sources, by offering alternatives to more traditional forms of debt and equity financing.

The statement said, in the US, mortgaged backed securities market is valued in excess of $8.5 trillion.

“Ghana Home Loans shall organise a stakeholders’ seminar in Accra later this month to finalise its preparations towards the issuance of the first set of mortgage backed securities, and in attendance shall be representatives from regulatory bodies, international investment banks and law firms, pension fund managers, regulators and accounting firms,” it said.