Saturday, March 03, 2007 Councilors plan to write off housing loan penalties By Linette C. Ramos Sun.Star Staff Reporter
TO ENCOURAGE housing loan beneficiaries to settle unpaid accounts amounting to P280 million, two Cebu City councilors are proposing to write off close to P20 million in accumulated penalties for unpaid loans.
The P20 million represents the unpaid penalties on housing loans of some 6,500 urban poor dwellers who availed themselves of the City Government’s housing program in 1992.
A total of 8,127 beneficiaries were granted loans amounting to P418.3 million, but as of Oct. 30 last year, up to 80 percent or 6,500 of them were delinquent in the payment of their loans.
The City has been able to collect only P67.6 million and about P280 million is still tied up in loans, according to the records of the Division for the Welfare of the Urban Poor (DWUP).
“The City intends to collect these delinquent loans by devising a payment scheme that is easy to implement on the part of the City, and juicy enough to encourage delinquent borrowers to pay the loans,” Councilor Jose Daluz III said.
Requirement
Daluz and Councilor Gerardo Carillo proposed the “Cebu City Socialized Housing Condonation Ordinance of 2007” during the council session last Wednesday.
The measure was referred to the committee on laws for review.
But before their penalties can be condoned, the ordinance requires the beneficiaries to pay 10 percent of all due and demandable arrearages covering the principal and interest of their unpaid amortization.
The balance will then be restructured and paid within the remaining period of the loan, which shall in no case be less than two years.
In a phone interview yesterday, Daluz said the amount of the penalties that will be condoned is negligible compared to the amount the DWUP will be able to collect if the ordinance is approved.
“While we are writing off some P20 million, this is also a collection method. It is our way of collecting the unpaid amortization. If we can collect that by condoning their penalties, we will be able to collect almost the same amount if the beneficiaries take advantage of the ordinance,” he told Sun.Star Cebu.
The DWUP has repeatedly been criticized by the City Council in the past for its inefficient collection system.
DWUP’s dismal performance in collecting housing loans and unpaid accounts amounting to hundreds of millions were some of the issues the council considered when it deliberated on the lot swap proposal two years ago.
The council had asked about the chances of collecting from the lot swap beneficiaries had the agreement between the City and the Province pushed through, since the occupants will be transacting with the DWUP instead of the Capitol.
