FINANCIAL AND LEGAL BARRIES IN IMPLEMENTING SECONDARY MORTGAGE FACILITIES IN INDONESIA
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Abstract
The research is motivated to analyze mortgage-backed securities to solve the housing supply backlog problem in Indonesia. The first problem is regarding the legality of mortgage backed securities in Indonesia, the second problem is about the disinterest of the housing industry in Indonesia to take advantage of mortgage backed securities, and the second problem is optimizing existing resources to make mortgage backed securities more attractive. Since its establishment in 1998 until 2015 the mortgage backed securities or secondary housing financing facility has not been maximally utilized by the financial industry in Indonesia as an alternative source of funds to finance the provision of housing. The financial industry is still making maximum use of primary housing financing by providing loans whose funds come from third party funds. Mortgage backed securities are not attractive to the financial industry because the subject of implementation, namely PT SMF Persero, is less well known and because there are doubts about the financial benefits of mortgage backed securities for the financial industry and investors. This research is based on empirical studies conducted directly on the housing finance provider industry sector in Indonesia. A major breakthrough was made by creating new securities in the Indonesian capital market that can make mortgage backed securities more attractive, namely asset backed securities- securities participation (EBA SP), in this way mortgage backed securities are expected to be traded on the secondary market. The legal aspects to support the birth and operation of mortgage backed securities in Indonesia are complete, but the operational use of mortgage backed securities is experiencing problems due to the lack of interest in the financial industry in the issuance process and the character factor of the securities issued. The financial industry providing housing finance in Indonesia demands that the pricing of the issuance of mortgage backed securities and the trading process be made more attractive to investors.
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