New condonation law carries good features, could improve housing accounts

The Home Development Mutual Fund or Pag-IBIG Fund is optimistic of attaining improvement in housing accounts with the passage of Republic Act 9507 or An Act To Establish A Socialized Low-Cost Housing Loan Restructuring and Condonation Program.

Pag-IBIG Fund vice president for Southern Mindanao operations Jose W. Banzon, Jr. told Davao reporters that given this new law they see an improvement in their housing loan program even as he said that Southern Mindanao ranked third corporatewide in housing loan performance.

He said of their 12 percent borrowers of the Fund’s 470,000 members in Southern Mindanao, 82 percent are good accounts and only 18 percent in arrears.

 “We aim to increase our housing borrowers because that is our mandate to provide homes to our members,” he said.

 He said the P400,000 house and lot package has an interest rate of only six percent or a monthly amortization of P2,398.20 while the P700,000 package of seven percent interest rate has a monthly amortization of P3,326.51.

 Meanwhile he said for those with default accounts, the new condonation law could be the last opportunity for them to save their accounts. With the new law, he said there is no processing fee, no downpayment and with full condonation of accumulated penalties/surcharges.

He said there will condonation of portion of accumulated interest. The Pag-IBIG Fund Board still has to meet on March 30 to determine how much rate of interest will be condoned, he said.

 Under the old law or Republic Act 8501 he said there is no condonation of interest rate and it requires processing fee and downpayment. The other features include uncondoned interest is non-interest bearing and shall be paid in equal monthly amortization during the term of the Restructured Loan.

 The interest rate of the Restructured Loan is the original interest rate or 12 percent whichever is lower. Maximum term is 30 years with discount on interest for prompt payment.

Banzon also said that the applicant’s savings/contributions with Pag-IBIG Fund may be used to update his/her loan obligation. Foreclosed accounts covered by the Program provided oone-year redemption period has not yet lapsed.

The Loan Condonation and Restructuring Program or RA 9507 took effect on March 16, 2009 and will be implemented for 18 months (reckoned from March 16, 2009).

 But the Government Financing Institutions (GFIs) has the option to continue the program beyond 18 months. Legal heirs and successors-in-interest can apply for Loan Condonation and Restructuring in lieu of original borrowers.

He said those who have availed themselves of previous penalty condonation and restructuring program are eligible to apply.


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