Mortgage firms urged to introduce automated clearing house to clients

Mortgage companies are being called upon to introduce the Automated Clearing House (ACH) to their clients to make the collection of payments less cumbersome.

The ACH is an electronic payment system similar to standing orders. It enables a client to instruct his or her bankers to make regular or recurring payments on his or her behalf at a determined date.

This implies that anyone who signs onto a mortgage facility can ask the bankers to make the installment payments to the mortgage finance company.

“The use of the ACH is a far better option compared to post dated cheques and also provides an electronic audit trail that will ensure that there are no disputes over monies paid or unpaid,” the Chief Executive of Ghana Interbank Payment and Settlement Systems (GhIPSS) Mr Fred France told journalists in Accra.

Mr France noted the increasing interest in mortgage financing and said the use of ACH to finance such facilities would not only create convenience to the person taking on the mortgage but also the mortgage company.

Mr France explained that the ACH provides a lot of flexibility makes payment quicker and also provides security of the transaction.

He asked mortgage houses to add their voices to that of GhIPSS in propagating the good news about the use of ACH for such recurring payments.

He urged mortgage companies who are still not conversant with the uses and benefits of ACH to contact their bankers or come over to GhIPSS,” he said.

Currently a number of mortgage finance companies accept post dated cheques from their customers as a form of payment.

However this payment implies that the mortgage company must each time sort out its pile of cheques to determine which ones are due to be presented to the banks.

They also would have to content with mistakes on cheques which invariable will be rejected by the banks. There are also challenges reconciling the cheques received and what is entered into the books of the company and the contentions sometimes coming from the customer.

Mr France said all these problems are eliminated since payment through the ACH is electronic and also generate electronic receipt that can be verified in the event of disputes.

He noted the intensive public education by mortgage finance companies through fairs, exhibitions and seminars, to create a greater awareness about mortgage as a finance option for the purchase of property.

The awareness has increased the number of people who are now opting for the product. As people’s income increase, it is strongly anticipated that the demand for mortgage will shoot up.

“With such projected high numbers it will become very problematic if mortgage finance houses continue to depend heavily on postdated cheques, Mr France said and urged mortgage companies to shift attention to ACH and enjoy the benefit of an enhanced payment system.

Source: GNA

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