Esra ÖZSÜMER
ISTANBUL - Milliyet


More than a year after Parliament's approval of the mortgage law authorities finally began to take steps concerning the so-called “secondary market” which is the actual component of the mortgage system.
Secondary mortgage market is the place where primary mortgage lenders sell the mortgages they make to obtain more funds to finance more new loans. It provides liquidity for the lenders.
Within the framework of establishing the secondary market with government's support a mortgage financing body will be established. According to the current plans the Housing Development Administration of Turaaa or TOKİ will own 49 percent of that mortgage financing body. The banks and the firms which will distribute mortgage loans will also be required to partner the institution.
The first meeting related to the system's details was held June 4 in Istanbul with the participation of Erdoğan Bayraktar chairman of TOKİ Turan Erol head of the Capital Markets Board or SPK and Michael Bookstaber who is in charge of financing housing loans for International Finance Corporation or IFC.
The suggestion for the establishment of a mortgage financing body came from Turan Erol said Bayraktar. “TOKİ is in desperate need of resources. Therefore it is extremely crucial for us to be able to turn our receivable items into cash. IFC promised to give us financial support and the necessary funding. In addition the firm also assured us of setting up contacts with international funds” Bayraktar added.
The fact that a public institution will have a leading position in the secondary mortgage market's establishment in Turaaa has led to discussions whether TOKİ will acquire a role similar to that of the Federal National Mortgage Association or Fannie Mae a government sponsored enterprise or GSE of the United States. U.S. Fannie Mae was established with the objective of buying state-guaranteed mortgage loans and creating fertile ground for the secondary market in the United States. Meanwhile some experts suggested that TOKİ will operate as a mixed model since it is getting ready to grant incentives to private sector corporations for the construction of houses targeting lower and middle income groups as in the case of Sociedad Hipotecaria Federal or SHF in Mexico.