Sources said that NHMFC has agreed to rethink its intention to retain 25 percent of the asset management company that would take over the bad loans when they are awarded to the winning bidder.
NHMFC’s participation in the AMC had been the major point of contention that prospective buyers opposed and led to the failure of the first bidding last February.
According to a source, NHMFC could reduce the share that it intends to retain although housing officials gave no indications of how far the agency was willing to go.
The source said NHMFC wanted to retain 25 percent mainly to maintain a degree of influence in the management of the portfolio but the buyers balked at this.
"They believed it would be difficult for them to work with NHMFC if it retained that much in the AMC," the source said. "But the NHMFC board has agreed to reconsider."
The second bidding for the portfolio is scheduled sometime before May and the source said NHMFC’s decision would increase the chances that the second auction would succeed.
NHMFC refused to reveal how many bids were actually turned in but reports said there were two envelopes in the bid box. The NHMFC had earlier pre-qualified four groups: Goldman Sachs, Lone Star, Lehman Brothers and Deutsche Bank.
The NHMFC was assisted by Ernst & Young, the appointed financial advisor that packaged the portfolio for eventual sale under the Special Purpose Vehicle Act. However, the bidding and auction committee was forced to disqualify the bids because the documents were not signed by the bidders because of their respective reservations on several major points in the scheme.
The main point of contention was the proposed ownership structure of the AMC where NHMFC demanded continued protection by exercising significant control over the decision-making process.
The auction was also marred by concerns over Executive Order 281 which deferred the eviction, foreclosure and cancellation of housing accounts that have been marked inactive and delinquent.
The EO directed all government housing agencies to come up with a restructuring plan for the restructuring of delinquent accounts but DOF sources said the sale to private asset management companies would be part of this comprehensive plan.
EO 281 covered all delinquent housing loans for cancellation and foreclosure, foreclosed accounts and consolidated accounts with all government agencies under the National Shelter Program.