Mortgage sector suffers from the lack of specialized mortgage financing companies where dealing in the primary market is limited to banks only. Some of these banks rely on their own resources to finance mortgage lending activities whereas others refinance their loans through the secondary mortgage financing market. Two companies operate in this market: "Palestine Mortgage and Housing Company" (PMHC), founded as a public company in 1999 with a capital of twenty million dollars and its subsidiary " Palestinian Finance Mortgage Company."
The secondary market funding resources are limited since refinancing companies do not proceed to issuing loan bonds or bonds consolidated by securities assets noting that these bonds require a specific law for their issuance.
This sector is mostly in need of a "mortgage financing law" noting that the Authority is currently working on a draft of this law. On the other hand, the Authority has issued in 2007 licensing instructions for mortgage financing companies and real estate professionals as well as instructions such as "capital adequacy "and "mortgage loans allocations " to regulate the work in the market.
Year 2010 witnessed an upsurge in housing development projects, and it is expected to keep that momentum for the coming few years; hence establishing the legal frame work for this sector has become a priority for the PCMA. For that reason, it has enlisted the support of the World Bank through First Initiative to work on preparing the required law. PCMA has already received the first draft of the law and has since then been organizing workshops with stakeholders to get their input, in preparation for the final draft which is expected to come out in the near future.