Yikes! That Land Act has thrown a big stick into the mortgage works. How will lenders redraft the existing loans without risking facing objections from parties (other spouses) that were not part of the deal? Mortgages risk management is exposed by this Land Act. How do you remodel the risks of existing mortgages with such grey areas? The playing field is no longer in favour of the lender...

Is this why Mr Market is undervaluing HF?

The law is an ass!

I do not see KCB, HF and other banks losing out because the mortgage/charge documents are being redrafted to accommodate the new conditions stipulated by the Land Act 2012. Besides, in lending, the banks give more weight on the repayment ability of the borrower than on the security offered. If u check well, you will notice that those people with loans secured by properties, are people of good means with a credit rating and reputation to protect. Defaulting is not an option for them.

FYI, this law affects ALL LOANS (not just home loans) that are secured by properties registered in individual persons names. This is therefore a BANK WIDE issue and not just KCB and HF

@VituVingiSana, dont you think the redrafting of the mortgage/charge documents that is ongoing will sufficiently secure the banks? Notice that the redrafted security documents will incorporate all requirements of Land Act 2012 and will therefore cover the bank in case of default.

@VVS

•Why would a borrower refuse to sign the amended agreements
•Will banks really take the actions of such a borrower kindly
•I reiterate; the law is an ass, an idiot! Banks would certainly find a way of hammering such a borrower, if s/he comes up

Lawyers in the house, this is over to you

That's what caught the banks off-guard despite the intense lobbying. It has been applied retroactively. The same happened with the "land laws" re: new constitution regarding ownership of land by 'foreigners' or firms with even some foreign ownership i.e. conversion of freehold & 999-yr leasehold to 99-yr leasehold. This issue came into play for the listed Agricultural Firms.

A crooked borrower can take advantage. What happens if a 'good' borrower dies & his 'other' family shows up? How long do these cases take to resolve?

Needless fear.

How will the requirement for a spouse to sign the mortgage document affect the mortgage uptake?

If anything this will be an added security, if both spouses are involved. Two securities are better than one.

You are absolutely right. Section 108(2)of the Land Registration Act(the new law) says that both the rights of the bank and the liability of the mortgage holder will not be affected.