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The
Jamaica Mortgage Bank
Thirty years of
contribution to the Housing Sector
In an effort to
assist in addressing Jamaica's housing needs, the Jamaica Mortgage
Bank (JMB) was established in 1971.
The board of
objectives of the JMB are:
-
To foster the
development of housing island wide;
-
To
assist directly or indirectly in the development of co-operative
housing; and
-
To
develop an active secondary mortgage market
To achieve its objectives, the
JMB's functions to:
-
Mobilize loan funds for
on-lending to public and private sector
housing developers and to other lending institutions;
-
Operate a secondary
mortgage market facility;
-
Provide Mortgage Insurance
services as set out in the Mortgage Insurance Law No. 26 of
1970, whereby, inter alia, loans which are
made to purchasers of
residential dwellings are insured.
The following is a summary of the
activities of the JMB over the last thirty
years:
1970's
The JMB, during its formative years
in the 1970s played a major role in the provision of interim and
long term financing with respect to the construction
of houses throughout Jamaica. During this period in
particular, thousands of Jamaicans were able to acquire their own
homes as a result of the Bank's financial involvement.
Examples of interim and construction financing and long term mortgage financing would be Cooreville Gardens in St.
Andrew, Garveymeade and Westport in St. Catherine.
Further, from 1972 - 1977 the JMB was
actively engaged in the secondary mortgage market operations, with
the transactions relating to such purchases being undertaken on the
basis of an auction system. This system involved periodic
invitations for bids to approved seller/servicers
(i.e.)
financial institutions that were approved to sell mortgage loans to the JMB)
announcing that specific sums of money would be available for the
purchase
of eligible
home mortgage.
The JMB also administered the
Government of Jamaica Mortgage Insurance
Fund (MIF), since 1973 and to date has issued policies with a
total face value in excess of $130 Millon. The MIF currently stands over
$350 Million. Under the provision of the Mortgage Insurance
Act, the Bank can insure loans that are made by approved financial
institutions to the purchasers of residential dwelling, residential lots, commercial buildings and
agricultural properties, It is fair to say that the Mortgage
Insurance Programme has benefited both lenders and borrowers.
1980's
During its second decade the JMB
changed its focus and concentrated on
the promotion and funding of:
1) Squatter Settlements Upgrading
(provision of roads, water,
electricity and sewer facilities)
The main purpose of the Squatter Settlements Upgrading Programme
was to provide the residents with reasonable modern amenities and
legal ownership
of the land.
All lots (government and privately
owned) were sold on credit to the
occupants and monthly payments
were made to the Ministry of Construction
2)Core/Start-a-Home
Under this programme one and two bedroom houses were constructed
by the Ministry of Construction (Housing) and sold to
individuals. In the majority of cases the Ministry sold the
houses to the National Housing Trust for re-sale
to its contributors.
3) Rural Home Improvement and
Mortgage Loans
During the period 1980 - 1987 the JMB made loans totaling $8
Million to the Jamaica Co-operative Credit Union Members island wide
to be used to finance the cost of physical improvement to existing
dwellings and also to provide mortgage loan assistance with respect to the purchase of houses.
These programmes were financed by
loans from U.S. Investors totaling about US$40 Million, which were
guaranteed by the United States Agency for International Development
(USAID) and the Government of Jamaica.
1990's
At the commencement of the 1990's the
JMB undertook comprehensive financial restructuring which placed it
in an even more favorable position to implement
and expedite its lending process. As a consequence of
this the JMB began to place more emphasis on the granting of interim construction loans
to be used for financing the construction of houses and the
financing with respect to serviced lots.
The reactivation of the Secondary
Mortgage Market Operations in the early
part of 1996 has enabled the JMB to enhance and stimulate much
activity in Jamaica's Real Estate Market.
During this period the Bank continued
its involvement in the funding of
housing infrastructure and housing
development projects. The JMB remained committed and firm in its determination to assist with the provision
of
affordable housing for the Jamaican people.
At the end of the 1990's the Jamaica
Mortgage Bank, the National Housing
Trust and the National Housing Development Corporation accounted for
69 percent of the Housing starts in Jamaica, with the private sector
accounting
for the remainder.
The New Millennium
Beginning
with the fiscal year ending March 2000, the JMB commenced a
number of programmes which were aimed at assisting the Bank achieve
its
goal of financing environmentally friendly housing projects
throughout Jamaica. During this period assets grew by 19
percent to $2.3 Billion, while
disbursements of $857 Million were made.
For the future the
JMB will strive to be more visible and aggressive in the market
place, as it makes every effort to be a better facilitator of home
ownership by Jamaicans.
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