New collection strategy to save housing agency P5 B

While home financing agencies, saddled with sour and non-performing real estate mortage accounts, would traditionally turn to account foreclosure to recover their fund exposures, the National Home Mortgage Finance Corporation (NHMFC) is employing an innovative and alternative strategy to costly foreclosure -- sale of mortgage rights (SAMOR) -- to save an estimated P5-billion in costs.

This was reported by Dr. Augusto A. Legasto Jr., NHMFC president, in a speech before the recent assembly of NAGSIKAP (Nagkakaisang Samahan sa Ikauunlad ng Antas ng Paniniraham), an NHMFC-accredited, nationwide volunteer organization of community workers for socialized housing assisting the agency in loan collection.

Legasto recalled that when he assumed stewardship of NHMFC in Sept. 1998, an estimated 134,000 housing loan accounts were considered past due and forecloseable, which at an average of P40,000 to foreclose each non-performing account, would cost the agency over P5-billion and some two years to complete.

Other than the huge costs it would have entailed, foreclose during the previous NHMFC administration had not reached the state of registration of the Certificate of Sale on the foreclosed account, hence the one-year redemption period would not start to run, for the account to be sold or liquidated, he explained.

The sale of mortgage rights involves the assigning, transferring, disposing or alienating to another person (natural or juridical) NHMFC's rights, or interests or participation in the mortgage loans NHMFC had earlier financed either under its Unified Home Lending Program or the Community Mortgage Program, he said.

The program is based on the powers and functions of NHMFC as provided in its charter, particularly Section 5 (a) of P.D. 1267, where all delinquent or past due accounts (over six months in arrears) shall be eligible for publication and public auction sale of the mortgage rights, Dr. Legasto informed.

But prior to the sale of mortgage rights, affected housing beneficiary-borrowers are first assisted to avail of the option to update their accounts or renew their loans under NHMFC's affordable payment program. It is only when they have defaulted on the 30-day grace period from date of publication, that the mortgage rights are sold in a public bidding, he cited.

"First and foremost, NHMFC's "Kuleksyon na May Puso" program tries to assist economically-distressed housing beneficiaries to continue paying their accounts at affordable schemes, Legasto added.