Pursuant to Palestine Capital Market Authority Law No. (13) of 2004, the PCMA supervises and oversees the mortgage finance sector. This falls within the PCMA’s primary objective of creating an enabling environment for capital stability and growth and protecting investors’ rights, by developing the legislative framework regulating the mortgage finance sector, including real estate appraisers.
Banks dominate the primary market of the mortgage finance sector, which involves the direct provision of loans to individuals, due to the high liquidity enjoyed by the Palestinian banking sector, the low cost of deposits as banks’ main funding source, and its extensive branch network. This poses a challenge for mortgage finance companies in competing and operating within the primary mortgage finance market.
As for the secondary market of the mortgage finance sector, which involves the refinancing of loan portfolios granted by banks to individuals, Palestine Mortgage and Housing Corporation continues to operate in the market through its financing arm, the Palestine Housing Finance Corporation. The company has had a significant impact on the expansion and growth of the mortgage finance market through the refinancing of banks’ mortgage loan portfolios. However, due to the liquidity available at banks, the availability of financing facilities, and the increase in informal activity in real estate financing, secondary market activity represented by Palestine Mortgage and Housing Corporation’s refinancing of mortgage loans has declined.
As for real estate appraisal, this profession is important in determining the value of real estate collateral on the basis of which loans are granted. The loan-to-value ratio (LTV) is considered one of the prudential policy tools used to maintain the stability of the mortgage market. Accordingly, the more accurate and realistic the appraised value of the property, the more it contributes to achieving the objective of stabilizing the mortgage market, ensuring that the values of financed properties closely reflect reality in the event of borrower default and the banks’ need to foreclose on these properties to recover their funds.
Accordingly, and based on the PCMA’s responsibility for supervising and overseeing real estate appraisers, the PCMA has worked since 2007 to develop the legislative framework regulating oversight of the work of real estate appraisers. The PCMA applies the appropriate tools in accordance with the principles set out in Instructions No. (3) of 2012 on the Licensing of Real Estate Appraisers, as amended, in order to grant licenses to qualified and experienced persons. In this context, the PCMA organizes training
