RELIEF FOR HOUSING LOAN ARREARS

2008-08-14 14:24:30 - Bicam starts deliberation on the housing loan restructuring program measure

MANILA

Some 368,535 delinquent home borrowers will get relief from losing their homes once the legislative measure proposing for three-year housing loan restructuring program becomes into law.

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The bicameral conference panels of the House of the Representatives and the Senate started its deliberation Wednesday on the proposed measure and expected to get its final approval within in the next two weeks.

Rep. Rodolfo Valencia, chairman of House Committee on Housing and Urban Development, said bicameral conference committee will meet again on Tuesday to reconcile all minor differences between the Senate and House versions of the proposed 'Socialized and Low Cost Housing Loan Restructuring Act of 2008.'

House Speaker Prospero C. Nograles, who is pushing for the bill since 1998, said the immediate enactment of the loan restructuring bill is timely relief for home borrowers whose houses are in danger of foreclosure in the face of the global economic crisis.

Nograles, the principal author of the House-approved HB 4220 together with Valencia and Housing vice chairman Paranaque Rep. Eduardo Zialcita, stressed the need to stop all foreclosures in these times of economic difficulties because this will only aggravate the country's social woes.

'Roof over our heads is a basic necessity and a basic human right. The primary purpose of providing socialized housing and low-cost housing is to give our people, even the poorest of the poor, a decent place to live. We should not deny them that right,' the Speaker said.

'This is a major part of the President's social alleviate program,' Nograles noted, as he commended Valencia and his Senate counterpart, Senator Juan Miguel Zubiri, for giving top priority to this anti-foreclosure program.

Zialcita, for his part, said the measure is aimed at mitigating the pain that 'our countrymen are suffering because of the global food and energy crisis that has taken its toll on the local economy.'

'It's not our people's fault,' he said.

The three-year housing loan restructuring program would cover all socialized and low-cost housing loan accounts with any of the government financing institutions and agencies that have at least six months of unpaid monthly amortizations, the original principal amount of which does not exceed P2 million.

'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,' Zialcita also said.

The proposed law covers a defaulting account notwithstanding that the same has previously availed of the benefits of any previous restructuring program.

It also removes the requirement of the previous condonation program that the combined family income of an applicant must not exceed P300,000.

The application for restructuring shall only be charged a processing fee lower than those charged under previous programs and no down payment shall be required.

Likewise, all penalties and surcharges shall be condoned upon approval of the restructuring application provided that a reasonable portion of the accrued interests will be condoned.

The remaining accrued interests will be treated as a non-interest bearing principal to be equally spread during the term of the restructured loan and that the restructured original principal loan will only be imposed a 6% interest.

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 65.

However, 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.

Other co-authors of the proposed measure 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.