AMMAN -- United Arab Investors Company (UAIC) and Canada Mortgage and Housing Corporation (CMHC) will launch the first mortgage insurance company in Jordan by the end of the year.
According to UAIC officials, the company which will be registered under the provisional name Jordan Mortgage Insurance Company (JMIC) will provide mortgage insurance to retail mortgage lenders and banks in Jordan.
Mortgage insurance is a form of credit insurance that protects a lender against the default risk of a residential mortgage borrower. It is also a form of risk sharing with a mortgage lender against default by a borrower of a mortgage
A feasibility study, conducted by UAIC, CMHC and Trycana Development of Canada and funded by the Canadian International Development Agency (CIDA), resulted in the establishment of JMIC.
"JMIC will contribute to further expand the growing property market and real-estate sector," UAIC Chairman Fayez Tarawneh told The Jordan Times.
"We are very pleased to be working in close collaboration with a well-established company such as CMHC," said UAIC CEO. "We also feel that this new mechanism will highly contribute towards the realisation of the powerful and humane slogan that His Majesty King Abdullah II had initiated, namely: A home for every citizen."
CMHC Executive Director Pierre David said his company is taking the lead in sharing Canada's housing expertise with the world.
He added that by making housing more accessible in other countries and helping Canadian companies find opportunities in new markets, CMHC is becoming an ambassador of Canadian excellence.
UAIC General Manager Younis Al Qawasmi stressed that through providing lending insurance products, Jordan's lenders will gain the confidence to increase their risk portfolios.
"Buyers will be empowered to make important decisions about their family's future," Qawasmi remarked.
Tim Elliot, CMHC director of international housing finance, said UAIC and CMHC will continue working closely with banks and retail lenders over the coming months to open new markets and offer lower down payments for borrowers.
"Currently the average age of a Jordanian borrower is 44 years whereas in the Americas it is between 25 and 30," Elliot indicated.
He explained that mortgage insurance allows lenders to lower down payments which will greatly increase the number of borrowers and market segments for obtaining a mortgage.
UAIC Business Development Manager Alaa Abu Obeid said JMIC is ultimately seeking to provide wider access to Jordanian citizens to buy a house sooner with a lower down payment.
By Mahmoud Al-Yahya
© Jordan Times 2006
