HOME GUARANTY CORPORATION, May 22, 2009
IMPLEMENTING RULES AND REGULATIONS FOR THE HOUSING LOAN RESTRUCTURING AND CONDONATION OF PENALTIES UNDER R.A. 9507, OTHERWISE KNOWN AS THE “SOCIALIZED AND LOW COST HOUSING LOAN …
the Housing Loan Restructuring and Condonation Program under R.A. 9507”,
the following terms shall be defined as follows:
a. “Abandoned Unit” refers to a housing structure
that has not been occupied by the borrower-owner for more than one (1)
year from the date of delinquency.b. “Condonation” means the relief given by law in
the payment of penalties, surcharges and a portion of accrued interest,
as approved by the HGC Board of Directors.c. “Contract-to-Sell” pertains to a bilateral
contract whereby HGC as seller expressly reserve the ownership of the
subject property despite delivery thereof to the buyers and binds itself
to deliver the title of the said property to the buyers upon full
payment of the purchase price.d. “Dacion en pago” refers to the mode of
extinguishing an obligation whereby the debtor alienates in favor of the
creditor property for the satisfaction of monetary debt.e. “Delinquent Accounts/Borrowers” refer to
accounts/borrowers with accumulated arrearages equivalent to at least
three (3) months of unpaid monthly amortizations/payments as of March
16, 2009.f. “Fire and Allied Perils Insurance” refers to a
yearly renewable term insurance on the housing structure subject of a
loan/sale against fire, lightning, earthquake shocks, typhoons and
floods.g. “Force Majeure” refers to those events which
cannot be foreseen or, if foreseeable, cannot be prevented or avoided by
the exercise of due diligence such as strikes or other labor
difficulties, rebellion or insurrection, acts of war, riots or civil
commotions, acts of public enemies, national emergencies, fire, flood,
earthquake or other catastrophes or acts of God.h. “Foreclosed Accounts” refer to accounts that
have been issued Certificate of Sale (COS) by virtue of auction sale
conducted by the court, sheriff or notary public and with expired
redemption period.i. “Foreclosure” refers to the legal procedure
either judicially or extra-judicially, as long as due process is
observed, for enforcing claims against a mortgagor in default of payment
of its obligation.j. “Guaranteed Accounts” means accounts assigned or conveyed to HGC pursuant to its guaranty business.
k. “IRET” means Interest Repricing and Extension
of Repayment Term pursuant to HGC Board Resolution No. 36-2005 dated
September 20, 2005, wherein the original interest rate of qualified
delinquent accounts are repriced to 6% to 12% depending on the original
loan value and the repayment term is extended to a maximum of twenty
(20) years.l. “Legal Heirs” pertain to persons who are called
to succeed to the rights and interests of a deceased person either by
provision of a will or by operation of law.m. “Loan Restructuring” refers to a process where
the principal terms and conditions of the original loan are modified in
accordance with an agreement setting forth a new plan of payment or a
schedule of payment on a periodic basis.n. “Mortgage Redemption Insurance” refers to a
yearly renewable term insurance where the borrower is covered for an
amount equal to the restructured obligation. This also refers to
Loan/Sales/Housing Redemption Insurance.o. “Outstanding Obligation” refers
to the sum of the outstanding loan principal, unpaid principal, accrued
interests and penalties, insurance premiums, taxes, foreclosure and
other incidental expenses, if any.p. “Program” refers to the Socialized and Low Cost Housing Loan Restructuring and Condonation Program established under R.A. No. 9507.
q. “Redemption” means regaining possession of a mortgaged property by paying the debt or fulfilling other obligations.
r. “Restructured Obligation” refers to the sum of the interest bearing and non-interest bearing obligation.
The interest-bearing portion refers to the total outstanding loan
principal, unpaid principal, unpaid insurance premiums, taxes,
foreclosure and other incidental expenses, if any.The non-interest bearing portion refers to the remaining accrued
interest due net of condoned portion, if any, to be paid in equal
monthly amortization within the term of the restructured obligation.s. “Socialized and Low-Cost Housing Loans/Obligations” refer
to housing loans/obligations the original amounts of which are within
the housing loan ceilings as determined by the HUDCC and the original
principal obligations of which do not exceed P2.5 million. These also
refer to the obligations of community/group/homeowners’ associations
(HOA) provided the principal amount of the individual member’s loan does
not exceed P2.5 million. These further refer to installment receivables
covering the sale of housing units/lots on installment basis, the
selling price of which does not exceed P2.5 million.t. “SRP” means Special Repayment Program pursuant
to HGC Board Resolution No. 03-2006 dated May 8, 2006, wherein qualified
delinquent borrowers can amortize their obligations categorized as the
interest bearing portion and the non-interest bearing portion for a
maximum period of twenty (20) years.u. “Successors-in-interest” refer to the
assignees, transferees and buyers of rights who have assumed the
original loan as supported by legal documents, including Special Power
of Attorney (SPA), duly approved by HGC.
SECTION 2. Coverage –
a. This program covers all outstanding housing loans granted,
acquired and being serviced by the Home Guaranty Corporation (HGC) as
follows:1. Guaranteed accounts assigned/conveyed to HGC by virtue of call payments;
2. BDC (Bliss) Accounts (exclusive of short term and renewable Contracts of Lease);
3. Abot-Kaya Pabahay Fund Accounts;
4. Folio I (Retail-NHMFC Assigned Accounts);
5. Community Mortgage Program and Cooperative Housing Program accounts;
6. HGC in-house retail accounts; and
7. Trust Accounts (subject to approval of trustor).b. The borrowers on record, including successors-in-interest/legal heirs, as of March 16, 2009 shall benefit from this program.
c. The program shall be implemented for a period of eighteen (18) months from March 16, 2009.
SECTION 3. Conditions –
a. The housing loan must have accumulated arrearages equivalent to
at least three (3) monthly amortizations/payments as of March 16, 2009.b. The original principal amount of the housing loan does not exceed Two Million Five Hundred Thousand Pesos (P2,500,000.00).
c. The member-borrower may apply only once for the restructuring
and condonation of penalties on the entire loan amount, except in case
of force majeure affecting the ability of the borrower to fulfill
his/her financial obligations under the contract.d. Borrowers who have availed themselves of any previous
condonation program of HGC or any government financial institution or
housing agency may still avail themselves of the benefits of this new
condonation and loan restructuring program.e. The program provided for under RA 9507 shall be construed as a
separate and distinct program from the ones being implemented by HGC.f. Qualified borrowers shall be notified through letter,
publication or posting at his/her last known address, or at the unit
subject of the loan on how they can avail themselves of this program.
SECTION 4. Exclusion from Coverage – The following housing loan accounts shall not be covered by this Act:
a. Any account without a single payment since take out/effectivity of Contract to Sell;
b. An account which housing unit has been abandoned by the
borrower-owner for more than one (1) year from the date of delinquency;c. An account which housing unit is assigned/transferred or
occupied by a third party other than the original registered beneficiary
or his/her legal heirs/successors-in-interest;d. An account that has been foreclosed and the redemption period has already lapsed;
e. An account covered by a Contract to Sell that has expired or been cancelled; and
f. An account whose underlying asset has been surrendered to HGC
through a dacion en pago, the title of which has already been
consolidated/transferred in the name of HGC.
SECTION 5. Scope and Manner of Condonation –
5. 1 General Guidelines
a. The delinquent borrower /installment buyer, legal heir or
successor-in-interest applying for condonation and loan restructuring
shall not be charged a processing fee and no downpayment shall be
required.b. All accumulated unpaid penalties and surcharges on due and
demandable arrearages shall be condoned upon approval of the
restructuring application.c. All due and demandable arrearages in interest, net of condoned
amount, shall be treated as non-interest bearing principal to be paid in
equal monthly amortizations during the term of the restructured loan.d. The outstanding principal balance of the housing loan shall be
restructured over the remaining term of the original loan or thirty (30)
years, whichever is longer, provided that the extension of the
restructured loan shall not exceed the difference between the
borrower’s age at the time of the application and age seventy (70) at an
interest rate of not more than the interest of the original loan or
twelve percent (12%), whichever is lower.e. Penalties that have been fully paid when a borrower/beneficiary
updated his/her account and/or availed himself/herself of this
restructuring and condonation program are not within this scope.
5.2 Specific Guidelines
a. Borrower who has availed himself/herself of the existing restructuring programs of HGC shall be entitled to the following:
1. Special Repayment Program (SRP):
1.1 All accumulated unpaid penalties and surcharges on due and
demandable arrearages of the non-interest bearing portion of the loan
and all accumulated unpaid penalties and surcharges on due and
demandable arrearages of the interest bearing portion of the loan after
availing himself/herself of SRP shall be condoned upon approval of the
restructuring application.1.2 All accrued interest of the non-interest bearing portion of
the loan and the due and demandable arrearages in interest on the
interest bearing portion of the loan after availing himself/herself of
SRP, net of the total condoned amount, shall be treated as non-interest
bearing principal payable over the restructured term of the loan.1.3 The balance of the interest bearing portion may be payable
over the remaining term of the loan or may be extended to thirty (30)
years whichever is longer, provided that the extension of the
restructured loan shall not exceed the difference between the
borrower’s age at the time of the application and age seventy (70) at an
interest rate of not more than the interest of the restructured loan or
twelve percent (12%), whichever is lower.2. Interest Repricing and Extension of Repayment Term (IRET)
2.1 All capitalized penalties and surcharges and due and
demandable penalties and surcharges shall be condoned upon approval of
the restructuring application.2.2 All capitalized interest before and due and demandable
interest, net of the condoned amount, shall be treated as non-interest
bearing principal payable over the restructured term of the loan.2.3 The outstanding restructured principal balance may be
payable over the remaining term of the loan or may be extended to thirty
(30) years whichever is longer, provided that the extension of the
restructured loan shall not exceed the difference between the
borrower’s age at the time of the application and age seventy (70) at an
interest rate of not more than the interest of the restructured loan or
twelve percent (12%), whichever is lower.
b. Borrower whose account has been foreclosed but the redemption period has not yet expired shall be entitled to the following:
1. All accumulated unpaid penalties and surcharges on total
outstanding obligation shall be condoned upon approval of the
restructuring application.2. The remaining balance of the redemption value inclusive of HGC
advances and foreclosure expenses, such as insurances, filing,
publication, posting, out of pocket, attorney’s fees and other
incidental expenses, net of the condoned amount on interest, shall be
payable upon approval of the application and before the expiration of
the redemption period.
c. A borrower who is a prompt payor may apply for restructuring of
the outstanding principal balance payable over the remaining term of the
loan or may be extended to thirty (30) years whichever is longer,
provided that the extension of the restructured loan shall not exceed
the di fference between the borrower’s age at the time of the
application and age seventy (70) at an interest rate of not more than
the interest of the original loan or twelve percent (12%), whichever is
lower.
SECTION 6. Availment Procedures – Applicants for the program shall follow the following procedures:
a. The borrower, his/her legal heir or successor-in-interest shall file the application for the Program with HGC.
ASPA shall be accepted only in cases when the party is working
overseas and the SPA presented has been executed and duly notarized
prior to his/her departure from the country or duly authenticated by the
Philippine consul in the foreign country, or when the applicant is
physically incapacitated as evidenced by a Medical Certificate.b. HGC shall evaluate the application of the borrower/legal
heir/successor-in-interest and if found qualified, require the latter to
accomplish the Financial Restructuring Agreement and Promissory Note
and affix his/her signature on the Restructured Financial Package.
SECTION 7. Accounts of Borrowers Who Become Permanently Physically Incapacitated –
In case of permanent physical incapacity of a borrower, his/her legal
heirs and successor-in-interest may assume payment of his/her
outstanding housing loan. Such legal heirs and successors-in-interest
must pass the HGC’s eligibility requirement before they are allowed to
assume payment of the borrower’s loan obligation. In case of death of
the borrower, the proceeds of the Mortgage Redemption Insurance (MRI)
shall be fully applied. Any remaining balance shall be amortized by the
legal heirs or successor-in-interest.
SECTION 8. Incentive for Prompt Payment of Monthly Amortization –
All accounts, the monthly amortizations of which are paid on time at
all times, shall be entitled to incentives in the form of a one percent
(1%) reduction on the interest.
SECTION 9. Remedies Against Delinquent Accounts –
9.1 The HGC shall continue to exercise its right to foreclose the
mortgage, cancel Contracts to Sell or other remedies involving
properties covered by the following:a. Accounts excluded from the coverage of this program as listed in Section 3;
b. Delinquent accounts of borrowers who fail to avail themselves
of the benefits under this condonation and loan restructuring program;
andc. Accounts of borrowers who avail themselves of the benefits of
this program but subsequently defaults in the payment of three (3)
consecutive monthly amortizations of the restructured loan.9.2 The foreclosure proceedings shall be exempt from publication in
newspapers of general circulation. In lieu thereof, the following shall
be undertaken:a. Posting of the date and place of auction shall be made for not
less than twenty (20) days in at least three (3) conspicuous public
places in the city or municipality, where the property is situated;b. A written notice of foreclosure shall be sent to the borrower at his/her last known address.
9.3 The Contracts to Sell shall be considered cancelled after
thirty (30) days from receipt by the buyer of the notice of cancellation
or demand for rescission of contract/deed by notarial act sent to
his/her last known address or to the address of the subject property.
SECTION 10. Reporting – HGC shall submit, through
the HUDCC, to the Committee on Urban Planning, Housing and Resettlement
of the Senate and the Committee on Housing and Urban Development of the
House of Representatives an annual report on the implementation of the
condonation and loan restructuring program.
(SGD.) GONZALO BENJAMIN A. BONGOLAN
President