Home Guaranty Corp eyes P2B from delinquent accounts

State-owned Home Guaranty Corp. (HGC) expects to collect roughly P2 billion worth of home guarantee payments from 4,000 delinquent accounts through the implementation of the Socialized and Low-Cost Housing Loan Restructuring Act of 2008.

HGC president Gonzalo Bongolan said the proposed measure, which has been approved by a bicameral panel on Monday, would improve the viability of the state agency as it could now restructure the obligations of delinquent borrowers.

“It’s positive for us. We can now have the flexibility to restructure,” he told reporters yesterday.

Bongolan said the 4,000 accounts are considered non-moving accounts or those that that have not had payments over a period of up to five years. These accounts represent no more than 20 percent of the agency’s cash flow, Bongolan said.

Under the proposed measure, government housing agencies would allow for extended payment period of housing loans. The pending legislation will also allow for lower borrowers’ monthly amortizations and condone penalties and surcharges.

All socialized and low-cost housing loans borrowed from government financing institutions and agencies with unpaid monthly amortizations of at least six months are covered by the measure. The original principal amount of the loan should not exceed P2 million.

The measure is expected to benefit homeowners of socialized and low-cost homes who have not been able to settle their monthly amortizations for at least three months.

Senator Juan Miguel Zubiri, chairman of the Senate committee on urban planning, housing and resettlement said those who will be covered can avail of the program only once so as not to encourage delinquencies.

He also said that waiving all penalties and surcharges will lessen the burden on poor borrowers.

On the other hand, the measure also provides incentives, such as discounts on loan interest for home loan borrowers who pay promptly and religiously.