House Speaker Prospero C. Nograles said that Philippine President, Gloria Macapagal-Arroyo, is set to sign into law, the housing loan anti-foreclosure program that would save some 368,535 delinquent housing loans from being evicted from their house. The total cost of the defaulted loans amounts to about P66.69-billion. This law will allow for housing loan refinancing for delinquent borrowers as well as condonation of accrued interest and penalties due to the remiss of payments. Sort of our version of a subprime loan bailout.
Cong. Nograles said that the anti-foreclosure law is opposite of the United States $700 Billion bailout package which provides credit to bankrupt investment houses and banks due to the subprime mortgage debacle.
“Here in the Philippines, we are not bailing out those who provided the housing loans but we are saving the borrowers themselves” he said.
Nograles, who is one of the principal authors of HB 4220 together with Rep. Rodolfo Valencia and Housing vice chairman Paranaque Rep. Eduardo Zialcita. Other authors of the bill are Deputy Speakers Amelita Villarosa and Raul del Mar with Reps. Mary Ann Susano, Rolando Uy, Thelma Almario, Eufrocino Codilla, Sr., Reylina Nicolas, Marcy Teodoro, and Edgardo Chatto.
Valencia said the bicameral conference committee worked overtime to reconcile all minor differences between the two versions of the proposed “Socialized and Low Cost Housing Loan Restructuring Act of 2008″ contained in House Bill 4220 and Senate Bill 1987.
The program will cover all socialized and low-cost housing loan accounts with any of the government financing institutions and agencies that have at least three (3) months of unpaid monthly amortizations, the original principal amount of which, does not exceed P2.5- million.
The housing loan restructuring measure provides for the creation of a Congressional Oversight Committee composed of the Chairman of the Senate Committee on Urban Planning, Housing and Resettlement and the Chairman of the House Committee on Housing and Urban Development, four (4) members of the Senate and four (4) of the House of Representatives.
The Oversight Committee, however, upon review and approval of the implementing Rules and Regulations shall cease to exist, provided that an annual report on the housing loan restructuring, housing loan refinancing and condonation program are regularly submitted to Congress by the GFIs and housing agencies.
Zialcita, on the other hand said “it will also be beneficial to the housing agencies and government financing institutions as not only will they be able to continue their collection of amortization, but will give them relief from the difficulty of evicting delinquent occupants and from the tedious and costly foreclosure procedures that average from P50,000 to P136,000.”
According to Valencia, the law covers defaulting accounts even if the delinquent home borrowers have already availed of the benefits of previous restructuring programs.
“An application for restructuring shall not be charged a processing fee and no down payment shall be required for a borrower to apply for the benefits of this loan restructuring and condonation program,” Valencia said.
Likewise, all housing loan penalties and surcharges shall be condoned upon approval of the restructuring application. As such, reasonable portion of the accrued interests will be condoned while the remaining accrued interests will be treated as non-interest bearing principals to be equally spread during the term of the restructured loan.
The restructured original principal loan will only be imposed an interest not higher than on the original loan or not more than 12%, whichever is lower.
The term of the housing loan may be extended for a period longer than its original term in order to lower the amount, provided that the extension of the restructured loan must not exceed the borrower’s age at the time of application and the age 70.
However, Valencia added, the failure on the part of the borrower to pay any amortization during the three-year period shall be a cause for the housing agencies and government financing institutions to institute foreclosure proceedings against the property covered by the defaulting account.
And finally, in case of incapacity of a borrower, his legal heirs and successors-in-interest may assume payment of his outstanding loan provided that they pass the housing agencies’ or government financing institutions’ eligibility requirements.
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1 response so far ↓
1 lynsantoscalderero // Dec 5, 2008 at 5:01 pm
it is a really great help for us who are very deliquent due to financial problems but willing to pay the housing loan in affordable scheme… with this proposal we are now have a big chance to continue paying our housing loan.
hoping for the positive result of this Bill
thanks god bless and more power
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