Mortgage guarantee companies to ease housing sector fund woes

Chidambaram''s latest Budget has proposed the creation of mortgage guarantee companies by putting in place the much-needed regulation.

Creation of mortgage guarantee companies will improve alternative resources to housing finance companies at a lower cost, which will provide greater comfort to the lenders and improve their profitability.

"The introduction of reverse mortgage by the National Housing Bank is positive for DHFL, as we were the first to initiate this product and are ready with procedural aspects.

Emphasis on Bharat Nirman Yojna and the 31 per cent increase in the fund allocation to this scheme will generate employment in rural areas which will increase income levels of working people in these areas and increase the potential demand for housing finance," said Kapil Wadhawan, chairman and managing director of DHFL.

Chidambaram said the National Housing Bank would introduce ''reverse mortgage'' for senior citizens under which the house-owner would be able to avail of a monthly stream of income while remaining the owner and occupying the house.