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| Mr R.V. Verma |
With this product, lenders will get new customers who have not been part of the financial system. Existing customers will also benefit through better terms.
India Mortgage Guarantee Company..!
Mr R.V Verma added, ''India's first mortgage guarantee company will soon go operational. All the shareholder, technical services and subscription agreements have been executed among the 4 joint venture partners as of February 3, 2012. The 4 way joint venture will be named India Mortgage Guarantee Company"
While NHB will take a 38% stake in the company, and be the largest shareholder, US based Genworth Financial will be the technical partner with 36% stake. The ADB (Asian Development Bank) and International Finance Corporation have approved and taken 13% each in the company.
With mortgage guarantee, which is basically a risk-mitigant, a housing loan borrower may be able to reduce his/her equity for taking a loan. This is because the guarantee will provide the lender the freedom to lend more under the permitted loan-to-value norms. A mortgage guarantee company provides credit guarantee to housing finance companies and banks on behalf of home loan borrowers. The guarantees are invoked in case of default by housing loan borrowers.
Mr. R.V. Verma said,''The guarantee fee is the main revenue stream for a mortgage guarantee company. The guarantee fee could be either fully borne by the borrower or shared between the borrower and the lender."
About Genworth Financial..!
North Carolina based Genworth Financial is expected to soon approach the FIPB (Foreign Investment Promotion Board) for approval of the proposed foreign investment. The initial paid-up capital of the joint venture will be Rs. 120 crore.
The RBI (Reserve Bank of India) had few years ago come out with separate regulations for mortgage guarantee.
Src: Hindu
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