Zubiri: Senate Housing Committee relaxes loan restructuring to help families hold on to their homes

The Senate approved Committee amendments introduced by Senator Juan Miguel Zubiri on Senate Bill No. 1987 under Committee Report No. 30 before the First Regular Session of the 14th Congress adjourned.

"Government financial institutions (GFIs) have agreed to relax the rules and have a formula that will help 265,927 borrowers and 849 community associations stay in their homes," Zubiri said.

"This legislation will help borrowers more than the GFIs. We're saying to GFIs to hold off initiatives to collect delinquent payments and wait for this new scheme. We want them to collect as well as assure that our housing problems will not be compounded with housing ejections."

Zubiri acknowledged that various GFIs already implement their respective restructuring programs, but "bringing them together as a group had forced them to compare their programs with others. Many relented to the more accommodating terms to help their borrowers."

The bill's coverage are delinquent socialized and low-cost housing accounts with the Government Service Insurance System, Social Security System, Home Development Mutual Fund, National Home Mortgage Finance Corporation, Social Housing Finance Corporation, Home Guaranty corporation and housing agency National Housing Authority. Qualified accounts are those where the original principal does not exceed P2.5 Million.

"Common to government and industry is defining delinquent accounts as those with 6 months unpaid amortizations but, we chose to be liberal and went beyond business-as-usual."

The Senate adopted the following Committee amendments:

Starting the coverage of delinquent accounts to those that have three months of unpaid monthly amortizations, down from six months; and

Extending the maximum term of the restructured loan up to the difference between the borrower's age at the time of application and 70 years, up from 65 years.

Likewise, the following Committee amendments:

Excluding from coverage those accounts wherein the housing units have been abandoned for one year, from two years;

Excluding from coverage those accounts under the HGC mortgage guaranty program.

Benefits of Committee Report No. 30:

Condonation of all penalties and surcharges; Condonation of a reasonable portion of the interest of the housing loan, as determined by respective GFIs and agencies, of which All accrued interests shall be treated as non-interest bearing principal to be equally repaid, and All corresponding penalties and surcharges due from NHMFC and SHFC to their funders may likewise be condoned by their respective funders;

Extension of loan restructuring payment period in order to lower the monthly amortization; Incentives e.g. reasonable discount on interest for prompt payment of monthly amortization on restructured loan.

Other accounts excluded from coverage and therefor disqualified from availing of the benefits of the measure:

- Account without a single payment since take out;

- Account wherein the housing unit is occupied by a 3rd party; and

- Foreclosed account, the title of which had already been consolidated/transferred in the name of the GFI and housing agency.