THE Home Development Mutual Fund (Pag-Ibig Fund) will implement a housing loan restructuring program that will allow members who have lost their jobs to “hold on” to their houses and lots.

Pag-Ibig Fund has made the offer under its Socialized and Low-Cost Housing Loan Restructuring and Penalty Condonation Program.

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Victoria dela Peña, department manager of Pag-ibig Fund-Mandaue Branch, said the program will assure displaced workers that their properties acquired through Pag-Ibig Fund will not be foreclosed immediately if they go on default due to financial difficulties.

A borrower is considered in default when he fails to pay three consecutive monthly amortizations.

Dela Peña said defaults are inevitable among some Pag-Ibig Fund borrowers, especially in the face of the global financial crisis, since their priority would be food and education for their children.

“Once a borrower is in default, his loan would already be due and demandable but we give him until the ninth month before we initiate foreclosure proceedings. He is given a long period to fulfill his payments,” she said in an interview last week.

Default

The Pag-Ibig Fund, in its website, said the new restructuring program will cover delinquent accounts with at least three months of unpaid amortization payments as of
March 16, 2009. It will be implemented within 18 months from the effectivity of the program’s guidelines, which were approved on March 30.

Dela Peña hoped the time stated in the guidelines would be enough for member-borrowers to find another job so that they would be able to continue paying their loans.

“If the borrower really has a hard time paying his monthly amortizations after the sixth month or so, we would advise him to sell his property so that Pag-Ibig would still consider him a good account. By the time his finances improve, he can easily avail another housing loan through Pag-Ibig,” she said.

Pag-Ibig’s restructuring program, mandated under Republic Act 9507 or the Socialized and Low-Cost Housing Loan Restructuring Act of 2008, aims “to provide relief to delinquent borrowers in this time of financial crisis through condonation of accumulated penalties and a portion of accumulated interest.”

RA 9507 became effective last March 16 after President Arroyo signed it.

Under Pag-Ibig’s restructuring process, principal terms and conditions of the original loan are modified in accordance with an agreement, setting forth a new plan of payment on a periodic basis.

Dela Peña said that unlike previous restructuring programs of Pag-Ibig, this new program does not require any down payment or processing fee.

Without giving figures, dela Peña said several Pag-Ibig borrowers—including displaced overseas and local workers—are already in default due to lack of financial
resources.

Still, in the first four months of the year, she noted that the Visayas group of Pag-Ibig Fund is collecting up to 95 percent of the loans, manifesting “high collection efficiency.”