The new joint venture company, which will be owned by the The Hong Kong Mortgage Corporation (HKMC) and Cagamas in equal share, will be incorporated in Malaysia. At the outset, the joint venture will pioneer a mortgage guarantee program (MGP) for both conventional and Shariah-compliant mortgage loans originated by financial institutions in Malaysia.
By providing mortgage guarantee cover to loan originators on a portfolio basis, the MGP would offer an effective tool for banks and other financial institutions in Malaysia to better manage the credit risk exposure from their mortgage lending business. This mortgage guarantee arrangement will also help to develop the secondary mortgage market and also promote homeownership in Malaysia.
Dato’ Ooi Sang Kuang, chairman of Cagamas Berhad, said: We look forward to working with the HKMC to capitalize on the opportunities in the market. The longer vision is that our partnership will stretch to more joint developments of other mortgage business possibilities for us in Malaysia and also the ASEAN region as well. Cagamas will continue to be at the forefront in developing the financial and capital markets.
