Secondary market plan for mortgages welcomed



JEDDAH: ARAB NEWS

Published — Saturday 24 November 2012

Last update 24 November 2012 4:26 am

| نسخة PDF Print News | A A

The Kingdom is studying draft regulations that could see the creation of a real estate refinancing company similar to US firm Fannie Mae, according to proposals published by the central bank recently. The regulations are part of long-awaited government efforts to develop a housing mortgage sector in the Kingdom.
The regulations proposed recently fleshed out the laws principally by saying the government may establish Saudi Real Estate Refinancing Corp. to develop a secondary market in home mortgages.
The new corporation, with a minimum registered capital of SR 2 billion, would have to stay majority state-owned but real estate financing companies would be allowed to acquire stakes up to a combined total of 30 percent. The corporation might also offer shares to the public. It could provide the secondary mortgage market with access to both local and foreign financing instruments, the draft said.
Local financial firm Arqaam Capital has said the introduction of a legal framework for mortgages will see the amount of lending to purchase housing in Saudi Arabia eventually double to 12 percent of GDP.
“The problem was how do you get that person to repay if they cannot be kicked out of their house,“Nicholas Diacos of The Law Firm of Saleh Al-Hejailan, told Reuters. “In terms of making competitively priced financing in this market, it was a nightmare because the financiers were pricing the risk into their finance.”

What's happening around Saudi Arabia

The Kingdom has shared very friendly relations with the United States since the beginning of bilateral ties in the 1930s when full diplomatic relations were established. Despite all the ups and downs in recent years on certain policies, especially on...
AL-NAIRIYA: Women in Al-Nairiya governorate have called on the government to only allow gender-based voting because they believe this would allow women to get places on the new municipal councils.Nouf Al-Otaibi, a businesswoman in the area, said men...
Eighty-six-year-old American twins who met King Abdul Aziz in 1947 and King Abdullah in 2008 are now set to meet Custodian of the Two Holy Mosques King Salman in Washington on Saturday during his official visit.North County twins Jackie Voskamp and J...
RIYADH: Women in Saudi Arabia have been allocated a package of services to ensure their development and employment, Labor Minister Mufrej Al-Haqabani said Tuesday.The minister was speaking at the first panel discussion at the second National Business...
JEDDAH: Security authorities in Turaif in the Northern Border Province have arrested a young man in his 20s for killing his parents and wounding his siblings at their house on Wednesday.The arrested man reportedly used a sharp object to kill his pare...
The Date and Palm Festival, organized by the Royal Commission for Jubail (RCJ) at the Al-Fanateer waterfront in Jubail Industrial City, has received more than 90,000 visitors since its launch last Thursday.In addition, on Sunday the event received mo...

Stay Connected

Facebook