A New Kind of Mortgage Rights Issued on IFB

Wednesday, 2 May 2018

A new kind of Mortgage Rights, listed on IFB’s Structured Financial Product market on Jan 2018, issued on Iran Fara Bourse recently.

Mortgage Rights were listed for the first time in Iran Fara Bourse stock exchange in 2010 which made secondary tradings of mortgage securities possible in Iran capital market. The purposes for this securitization were reducing speculation, facilitating real estate transactions and increasing transparency of the tradings and that’s why the Shariah Board of the Securities and Exchange Organization of Iran (SEO) approved the whole process and issuance in Iran fara Bourse (IFB). These securities belonged to Bank Maskan, also known as the Housing Bank. In 2008, the Central Bank banned all banks and other financial institutions, except for the very bank, from providing residential mortgages.

Aiming housing finance, two years ago Money and Credit Council (MCC) decided that other banks rather than Bank Maskan can also securitize their loans. Thereafter, Bank Melli Iran aimed the development of financial instruments utilizing financial market capacity, tried to get the corresponding licence and the Central Bank of Iran (CBI) approved last year. It’s said that facility pricing improvement, increasing access to loans and increasing competitiveness are the of the most important aspects of the new mortgage issuing, listed few months ago and traded in IFB recently.