ADVOKS GLOBAL · KENYA
The Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019
29. Qualified collateral
Edition: 2022-12-31 · In force
29. Qualified collateral
(1)A mortgage refinance company loan shall be fully secured by qualified collateral.(2)A loan shall be deemed to be fully secured if—(a)in the case of eligible mortgage, the qualified collateral covers at least one hundred and twenty per centum of that loan amount;(b)it is secured by cash or government securities of equal amount; and(c)any other qualified collateral as may be approved by the Bank.(3)The qualified collateral shall be limited to the following assets—(a)assignment of receivables;(b)lien or assignment of a portfolio of first ranking charges or mortgages over owner-occupied properties which are fully insured and not in arrears;(c)securities issued, insured or guaranteed by the Government of Kenya;(e)any other qualified collateral as may be determined by the Bank from time to time.(4)The mortgage refinance company shall—(a)assess the book value of the qualified collateral securing the outstanding loans at least every six months;(b)require primary mortgage lenders to provide additional qualified collateral to compensate for any diminution in the market value or book value of the pledged collateral securing their outstanding loans;(c)require primary mortgage lenders to substitute qualified collateral if any security or residential mortgage securing an outstanding loan matures, redeemed, defaults, or becomes more than ninety days delinquent;(d)require the primary mortgage lenders to provide such additional information as it may reasonably require; and(e)carry out such site inspection as may be necessary or reasonable to verify the information provided by the primary mortgage lender.(5)The outstanding loans to a mortgage refinance company shall become due and payable if the primary mortgage lender is unable to provide sufficient qualified collateral to support its outstanding loans.