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HOME MORTGAGE FINANCE LAW, 1993 (PNDCL
329)
ARRANGEMENT OF SECTIONS
Section
1. Establishment of Home Mortgage
Financing Scheme.
2. Objects of Scheme.
3. Company to Administer Scheme
through Specified Financial
Institutions.
4. Remedies of Mortgages on
Default.
5. Appointment of Receiver upon
Default.
6. Mortgagee's Remedy.
7. Possession of Sale through
Court Proceedings.
8. NRCD 96 to Apply Except where
Otherwise Provided.
9. Bank of Ghana may Request
Particulars of any Loans Borrowed
by Company.
10. Information Relating to the
Company and Institutions not to be
disclosed.
11. Interpretation.
SCHEDULE
Schedule
IN pursuance of the Provisional
National Defence Council
(Establishment) Proclamation,
1991, this Law is hereby made:
Section 1—Establishment of Home
Mortgage Financing Scheme.
There is hereby established the
Home Mortgage Financing Scheme
(hereafter referred to as "the
Scheme").
Section 2—Objects of Scheme.
The Objects of the Scheme are—
(a) to provide mortgage financing
for the purchase of dwelling
houses by private individuals and
institutions including the
financing of the completion of
uncompleted houses;
(b) to establish a secondary
mortgage market with a view to
making money available to the
financial institutions which are
participating in the Schemes.
Section 3—Company to Administer
Scheme through Specified Financial
Institutions.
(1) The Company may administer the
Scheme through the financial
institutions specified in the
Schedule to this Law.
(2) The Secretary may on the
advice of the Bank of Ghana after
consulting the Company by
legislative instrument amend the
Schedule.
Section 4—Remedies of Mortgages on
Default.
Upon failure of performance on an
act or acts secured by a mortgage
to which this Law applies the
mortgagee may do either or both of
the following—
(a) sue the mortgagor or obligor
or both on any personal covenant
to perform;
(b) realise his security in the
mortgaged property in all or any
of the ways provided in this Law.
Section 5—Appointment of Receiver
upon Default.
(1) Upon failure of performance of
an act or acts secured by a
mortgage to which this Law applies
the mortgagee may appoint a
receiver for the purposes of this
section.
(2) A receiver appointed under
this section may take possession
of the mortgaged property and
collect by demand or action in the
name of the mortgagor or the
mortgagee or otherwise, all income
including arrears accruing from
the mortgaged property, give valid
receipts for all income collected
and do any other act necessary or
proper to manage the property
including the making of reasonable
repairs and improvements to the
property to protect its value or
to maintain or increase the income
from such property.
(3) A receiver appointed under
this section shall be deemed to be
the agent of the mortgagor and the
mortgagor shall be solely
responsible for the receiver's
acts or default.
(4) A person paying money to the
receiver shall not be concerned to
enquire whether any case had
happened to authorise the receiver
to act.
(5) The receiver may be removed
and a new one appointed at any
time by the mortgagee in writing.
(6) For the removal of doubt the
fact that a mortgagee has taken
possession of property subject to
a mortgage to which this Law
applies shall not prevent him from
appointing a receiver under this
section in respect of that
property.
(7) A receiver shall be entitled
to retain out of any money
received by him for his
remuneration, and in satisfaction
of all costs, charges and expenses
incurred by him as receiver a
commission at such rate not
exceeding five per centum on the
gross amount of all money
received, as is specified in his
appointment and where no rate is
so specified then at the rate of
two and a half per centum of that
gross amount or such other rate as
the court may think fit to allow
on an application made by him for
that purpose.
(8) The receiver shall if so
directed in writing by the
mortgagee, insure to the extent,
if any, to which the mortgagor
ought to have insured and kept
insured against loss or damage by
fire and other risks specified in
the mortgage agreement out of the
money received by him, any
building, effects or property,
comprised in the mortgage of any
insurable nature.
(9) A receiver appointed under
this section shall apply all money
received by him as follows—
(a) in discharge of all rents,
taxes, rates and other outgoings
affecting the mortgaged property;
(b) in payment of all annual sums
or interest on all principal sums,
due and having priority to the
mortgage;
(c) in payment of his commission
and of premium payable in
accordance with the mortgage and
cost of effecting necessary
repairs;
(d) in payment of all interest
accruing in respect of any
principal money due under the
mortgage;
(e) in or towards the discharge of
any principal money due under the
mortgage if so directed in writing
by the mortgagee;
and shall pay the residue if any,
or the money received by him to
the person who but for the
possession of the receiver would
have been entitled to receive the
income of which he is appointed
receiver or who is otherwise
entitled to the mortgaged
property.
(10) Any person who obstructs a
receiver in the discharge of his
functions shall be guilty of an
offence and liable on conviction
to a fine not exceeding
¢200,000.00 or to imprisonment not
exceeding six months or to both;
and in the case of a continuing
offence, to a further fine not
exceeding ¢10,000.00 for each day
on which the offence continues.
(11) Section 16 of the Mortgages
Decree, 1972 shall not apply to
any mortgage to which this Law
applies.
Section 6—Mortgagee's Remedy.
(1) A mortgagee's right to take
possession of mortgaged property
shall be the same as that provided
for under the Mortgages Decree,
1972 (NRCD 96).
(2) Subject to the provisions of
this section a mortgagee in
possession shall be entitled to
sell all or part of the mortgaged
property.
(3) Any person who—
(a) fails without reasonable
excuse, proof of which shall be on
him, to vacate any premises which
is subject to any mortgage to
which this Law applies upon being
requested to do so by the
mortgagee in possession; or
(b) obstructs a mortgagee in the
exercise of any power conferred on
him by this section,
shall be guilty of an offence and
shall on conviction be liable to a
fine not exceeding ¢200,000.00 or
imprisonment not exceeding six
months or to both; and in the case
of a continuing offence, to a
further fine not exceeding
¢10,000.00 in respect of each day
on which the offence continues.
(4) The sale of any mortgaged
property under this section may be
by public auction or private
contract and shall otherwise be
subject to such conditions as the
company may determine.
(5) A mortgagee who wishes to
exercise his power of sale under
this section shall give reasonable
notice of the sale to the
mortgagor and every encumbrancer
of whom he has notice.
(6) The Company may prescribe in
respect of the failure to perform
all or any class of acts what
period is considered reasonable
for the purpose of subsection (4)
of this section, so however that
in the case of default in the
payment of principal or interest
or both the notice shall be not
less than sixty days.
(7) Where a mortgagee has in
exercise of his power of sale sold
or caused to be sold the mortgaged
property to another person, the
title of the purchaser shall not
be impeachable on the ground—
(a) that no case has arisen to
authorise the sale;
(b) that the notice required under
subsection (3) has not been given;
or
(c) that the power of sale was
otherwise improperly or
irregularly exercised,
but the mortgagee shall be
personally liable for any loss
caused by that sale being carried
out in any or all of the foregoing
circumstances.
(8) Neither the mortgagor nor any
encumbrancer is precluded from
purchasing the mortgaged property
at a sale under this section;
except that a mortgagee at whose
instance the sale is made shall
not have the right to purchase the
mortgaged property except where
the sale is carried out at a
public auction or where it is
carried out by a private contract
approved by the mortgagor and all
the encumbrancers or approved by
the Court.
(9) The mortgagee exercising his
rights of sale under this section
may convey to the purchaser the
whole of the interest of the
mortgagor in the mortgaged
property.
(10) The purchaser of the
mortgaged property under this
section shall take title to the
said property free of all
interests to which the mortgagee
who caused the sale has priority
and free of that mortgage but
subject to all interests which
have priority to that mortgage and
shall be entitled as against any
person to all the documents
relating exclusively to the
mortgaged property other than
those title documents held by a
person with an interest having
priority to the mortgagee who
caused the sale.
(11) The proceeds from a sale
under this section shall be held
in trust for distribution by the
mortgagee who caused the sale.
(12) Proceeds from a sale shall be
distributed first, in payment of
all expenses properly incurred as
incident to the sale or any prior
attempted sale, secondly, in
payment of all sums secured by the
mortgage or with the same priority
as the mortgage, thirdly, payment
in the order of priority of any
encumbrances subsequent to that of
the mortgagee who caused the sale
and the residue to the mortgagor
or his successors in interest.
(13) A mortgagee on whom a right
of sale is conferred by this
section shall not be deemed to be
a trustee of the mortgagor in
respect of that right.
(14) Sections 18 (9) and 14 (b) of
the Mortgages Decree, 1972 (NRCD
96) shall not apply to any
mortgage to which this Law
applies.
Section 7—Possession of Sale
through Court Proceedings.
(1) Notwithstanding anything in
this Law where at least 85 per
centum of the total loan amount
has been paid or tendered by or on
behalf of the borrower the Company
shall not enforce any right to
recover possession of the premises
or its right of sale otherwise
than by a court action.
(2) Where the mortgage involves a
progressive repayment scheme or in
the case of an indexed
transaction, where the principal
advanced may be adjusted upwards,
if the adjusted principal
outstanding is less than 15 per
centum of the initial loan amount,
the company shall not enforce any
right to recover possession of the
premises or its right of sale
otherwise than by a court action.
Section 8—NRCD 96 to Apply Except
where Otherwise Provided.
Except as otherwise provided in
this Law the Mortgages Decree,
1972 (NRCD 96) shall apply to
mortgages under this Law.
Section 9—Bank of Ghana may
Request Particulars of any Loans
Borrowed by Company.
(1) The Company shall furnish, at
the request of the Bank of Ghana,
particulars of any loans granted
to any person in whose activities
or enterprise the Company or any
of its directors, officers or
employees is interested as
director, agent, guarantor or
principal shareholder.
(2) The Bank of Ghana may, if
satisfied that the loan is not in
the best interest of the public,
in writing prohibit the Company
from granting any further loan or
permit any such grant to be made
only subject to such terms and
conditions as the Bank of Ghana
may impose or the Bank of Ghana
may direct in writing to ensure
the repayment of any loan so
granted within such time and to
such extent as the Bank of Ghana
may specify in the direction, and
the Company shall comply with any
prohibition, terms, conditions or
direction imposed or given by the
Bank of Ghana.
Section 10—Information Relating to
the Company and Institutions not
to be disclosed.
(1) No director, officer or other
employee of the Bank of Ghana
shall disclose any information
relating to the affairs of the
Company or any financial
institution which he acquired in
the performance of his duties
except as required by law or by a
court of competent jurisdiction.
(2) No director, officer or other
employee of the Company shall
disclose any information relating
to the affairs of any borrower
with the Company which is acquired
by him in the course of his duty
except where the disclosure is
authorised by the borrower or is
in the interest of the Company.
(3) Any person who contravenes
subsection (1) or (2) of this
section commits an offence and
shall be liable on conviction to a
fine not exceeding ¢200,000.00 or
to a term of imprisonment not
exceeding six months or to both.
Section 11—Interpretation.
In this Law unless the context
otherwise requires—
"Company" means the Home Finance
Company Limited;
"Mortgagor" or "Borrower" means a
person who has taken a loan under
this Scheme;
"Mortgage" means a Mortgage
Agreement entered into between the
Home Finance Company Limited by
itself or with any other party and
the mortgagor;
"Mortgagee" means the Home Finance
Company Limited and the relevant
financial institution.
SCHEDULE
(Section 3)
FINANCIAL INSTITUTIONS
1. Barclays Bank of Ghana Limited
2. Ghana Commercial Bank
3. Standard Chartered Bank (Ghana)
Limited
4. Social Security Bank Limited
5. State Insurance Corporation
6. National Savings and Credit
Bank Limited.
Made this 5th day of January,
1993.
FLT.-LT. JERRY JOHN RAWLINGS
Chairman of the Provisional
National Defence Council
Date of Gazette Notification: 28th
May, 1993.
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