The Hindu Business Line : NHB working with insurance cos for `mortgage assurance'

Mumbai June 6 The National Housing Bank has sounded out insurance companies and is also working with the Insurance Regulatory and Development Authority for developing mortgage related insurance policies.

"We are working with insurance companies to create what can be called `mortgage assurance'. Conceptually, this would be like project finance insurance," said Mr S. Sridhar, Chairman and Managing Director, National Housing Bank, speaking to reporters on the sidelines of the `Financial Technologies Summit' in Mumbai on Wednesday. This means that insurance will cover the repayment of the loan in case the developer is not able to complete the housing project. Currently, insurers offer creditor life insurance, which covers the repayment of home loan in case of the borrower's death.

Reverse mortgage

The National Housing Bank is also working with the Insurance Regulatory and Development Authority for the insurance of reverse mortgage loans. "This will work like reverse annuity," Mr Sridhar said.

Reverse mortgage allows individuals or couples to borrow against their house and generate a regular stream of income while continuing to live in that house.

The Chairman said that the product was a niche one and would appeal to elderly couples in urban areas. "There are many elderly couples in the cities whose children have settled overseas. Besides, the concept of "Double Income and No Kids" has caught on with many couples," he said.

The housing finance regulator also plans to issue guidelines on the standardisation of processes related to housing finance.

"We have constituted a committee consisting of senior officials from banks and housing finance companies. Guidelines will soon be issued for standardisation of processes related to documentation, valuation of the property and repayment systems," Mr Sridhar said.

More Stories on : Mortgage | Housing Finance

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Strong rupee is cause for concern: Karnik

Rupee weakens by 14 paise

`Core banking has not made much difference in banking system'

Micro insurance offers new ways to combat poverty

Oracle offers back-office tool for coop banks

HDFC plans offering reverse mortgaging

APSFC plans one-stop-shop for financial services

Bond prices fall on profit booking

Call ends low at 0.2-0.3%

NHB working with insurance cos for `mortgage assurance'

Public sector banks get additional EDs

Narayanasami takes over as BoI chief