Amnesty for home buyers okayed

At least 100,000 families can save their homes from foreclosure under an amnesty program that will take effect on May 4, the National Housing Authority said yesterday.

Federico Laxa, general manager, said the housing agency will condone 100 percent of penalty on delinquent loans and 50 percent of unpaid interest rate charges.

Each residential borrower is eligible for amnesty provided his/her principal loan is less than P2.5 million and the arrears are equivalent to at least three monthly amortizations as of March 16 according to Laxa.

Borrowers who have made use of previous

condonation programs can still avail of the new amnesty under a law signed by President Arroyo on Oct. 13, 2008, Laxa told a press conference.

“The passage of the law is an avenue for housing loan beneficiaries to settle their obligations and save their homes from foreclosure,” Laxa said.

The law, Republic Act 9057 or Housing Loan Restructuring Program of 2008, will also work for those who have faithfully paid their monthly amortizations, Laxa said.

For borrowers who have updated their accounts as of March 16 and did not avail of condonation and restructuring, one monthly amortization shall be credited to his/her account. At least 50 percent of his/her monthly amortization will be credited to the outstanding principal balance if the account remains updated every month within a six-month period.

With the housing loan amnesty, Laxa said the agency will forego about P400 million, or half of the P800 million estimated collectible for amortization interests of about 95 percent of their total account, as well as about P1 billion in penalties.

But Laxa said the foregone amount will be recouped since the amnesty will encourage the borrowers to pay rather than lose their homes. NHA is beset by low collection at around 30 percent, although that is a slight improvement from 20 percent in the old regime. “We have about 100,000 accounts, of which 95 percent were in arrears—more than half of these arrears were more than three years old. If we can reactivate just half or 50,000 of these accounts, we can collect an average of P6,200 per month from each of them.”

Laxa said with an expected improvement in cash flows, the NHA will have additional fund to lend to more families.

Those with outstanding arrears will be notified by the NHA if they are eligible for the amnesty, said Jo Hottle, director for corporate planning. “But any of our beneficiaries who are in arrears can proceed to the project areas to apply for the program even if they have not received any notice.” –Roy Pelovello, Manila Standard Today