Mortgage finance firms could soon see their capital requirement doubled to EGP 100 mn — in local currency or its equivalent in FX — up from EGP 50 mn under new amendments proposed by the Madbouly cabinet on Thursday to the Mortgage Law, according to a cabinet statement.

Firms will have a year to comply with the new capital requirement once it gets the final greenlight. The Financial Regulatory Authority will have the right to extend this grace period by two years.

The rationale: The amendment came in response to the rise in building materials costs, which consequently has pushed up real estate prices.

Better protection for mortgage firms: The amendments also introduce procedures to expedite the process of recovering overdue payments, allowing mortgage firms to take legal action in certain cases. This comes with the aim of pushing mortgage finance firms to lend out more funds.

How it works: If the borrower fails to settle the overdue payments within 60 days of receiving a notice from the mortgage company — which the company can send once the payment is 30 days overdue — the firm can request the sale of the unit according to market price to settle the borrower’s dues.

THE CABINET ALSO APPROVED-

  • A draft decision to set up a new private freezone dubbed The Suez Canal for Modern Boats Company south of Safaga. The zone will manufacture, maintain, and export yachts.
  • Changes to economic courts: The ministers approved amendments to the Economic Court Act, which regulates economic courts and defines their jurisdictions. The amendments aim to regulate the formation of courts of first instance and chambers of appeal.
  • Extending foreign operators’ exemption from airport fees until November as part of the state’s efforts to boost tourism. The exemption was set to end last month.
  • A contract between the Finance Ministry and an unnamed company to provide clearing and settlement services for investors for a period of three years.
Tags: