CONVENTIONAL AND ISLAMIC MORTGAGE FINANCING: A LEGAL COMPARISON

ABSTRACT

Home ownership has been a problem to many people in Nigeria. This is the more reason why efforts are being made from all quarters to alleviate this problem. The two most prominent of these efforts are the Home Financing Schemes, otherwise known as Mortgage Financing, which are made by the public corporations and private institution. The effort of the public corporations is known as Conventional Mortgage Financing while a part of the private institution is that of the Islamic Economic System known Islamic Mortgage Financing. The focus of this research study is to compare the legal frameworks of these two opposite mortgage financing schemes. This is to be able to balance the regulatory issues that generate from the acceptability of these schemes in other to avail the Muslims the understanding of opting for the scheme that best aligns with the demand of their faith, without necessarily transgressing the law of the land in any way, bearing in mind the nascent status of the Islamic option, which is yet to enjoy a focused/specific municipal legal attention.

CHAPTER ONE

GENERAL INTRODUCTION

INTRODUCTION

Mortgage financing otherwise known as Home Financing is a product through which people are made or become home owners. It is a practice that is widely or relatively embraced by financial institutions as well as the private individuals (group of people). It is a subtle scheme that guarantees convenient home ownership through loan agreement. But in the same vein, it is seen generally beyond this perspective; a financing scheme through which desired property is acquired via the repayment process, especially with the conventional banking system.

It should be noted that this financing scheme is conceived in many ways: It differs in operationalization with the conventional banking operator, the legal practitioner and the practitioners of the Islamic economic system cum the (Shari‟ah) regulator. By and large, the converging point with all these practitioners is that Mortgage Financing is a method of acquiring legal or equitable property upon installmental repayment.

The Nigerian legal framework has thrived in the construction of provisions that regulate the operation of Conventional Mortgage Financing. This regulatory