MANILA, Philippines Senator Juan Miguel F. Zubiri on Wednesday said that government financial institutions (GFIs) have committed to relax the rules to provide loan restructuring to benefit 300,000 low income families and 849 community associations.
He said GFIs made the commitment during Tuesday's bicameral conference committee meeting on Senate Bill No. 1987.
This legislation will help borrowers more than the GFIs. Were happy that the GFIs promise not to close the doors on borrowers who are merely having a hard time paying up. They will initiate collection of delinquent payments after the issues are clarified. We want GFIs to collect as well as assure that our housing problems will not be compounded with housing ejections," said Zubiri, who chairs the joint panel of senators and congressmen tasked to reconcile the Senate and House of Representatives versions of the measure.
We anticipate a law that will relax loan restructuring to help families hold on to their homes," he said.
This will prevent a sub-prime catastrophe that befell the United States that sent US real estate dominoes falling down. In our bill, we are more interested in helping the borrowers continue paying for their loans at affordable and lesser monthly amortizations," he said.
In the US case, lenders were allowed by government to tempt borrowers to borrow more. Even if the borrowers were already neck-deep in debt. First, they offered deceptively low rates and low amortizations in the first few months. Later, they sprung up the hidden cost of high interest rates in succeeding amortizations. What followed was historical foreclosures with many being ejected out of their homes. Some lenders also lost their shirts in the process.
We are not letting that happen here," Zubiri stressed.
He acknowledged that various GFIs have already implemented their 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 bills 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 the National Housing Authority.
Qualified accounts are those where the original principal does not exceed P2.5 million. Delinquent accounts are those with three months unpaid amortizations. - GMANews.TV