Urban poor housing loan warranty signed

Housing Secretary Michael T. Defensor, chairman of the Housing and Urban Development Coordinating Council (HUDCC), has signed with non-government organizations an agreement that will provide a P10-million performance warranty coverage to housing loans granted to informal settlers under the government’s Community Mortgage Program (CMP).

The agreement, designed to boost the release of urban poor housing loans within seventy five (75) calendar days, was signed with Fr. Noel Vasquez, chairperson of Peace and Equity Foundation, which will provide the P10-million guaranty facility; Ma. Anna R. Oliveros, president of Congress of CMP Originators and social Development Organizations for Low-Income Housing; and Lawyer Angelico t. Salud, president of National Home Mortgage Finance Corp., the government agency administering CMP.

Under the agreement, Peace and Equity Foundation shall execute a guaranty coverage, in the form of cash deposited in escrow, in favor of NHMFC covering the undertaking by accredited CMP Loan originators to submit NHMFC specific compliance documents within a period of 18 months from CMP loan take out/release, and warranty to ensure a collection efficiency of 90 percent for the CMP project during the 18-month period.

The agreement also adopts a performance home warranty program(PHWP) for CMP loans, where NHMFC shall require only the submission of basic CMP loan documents before actual loan release and the deferred compliance documents shall be submitted by CMP loan originators, accredited by the Congress of CMP Originators, within the 18-month warranty period guaranteed by the Peace and Equity Foundation.

The agreement will further hasten the process of loan grants under the CMP which has been releasing loans at a record pace during the last 2 1/2 years.

Defensor cited that during the last six months, failure by CMP loan originators to comply with the delivery or NHMFC of the required loan documents has delayed the release of P728 million in housing loan assistance to the informal settlers, which will now be remedied by the performance warranty.

Meanwhile, Defensor has formed a task force to study the feasibility of the creation of subsidiary that will take over the implementation of the socialized housing programs of the NHMFC.

Salud said that Secretary Defensor called for the creation of NHMFC subsidiary in order to give more focus and further boost the implementation of President Gloria Macapagal-Arroyo’s home financing programs for the informal sector.

Among the socialized housing programs of NHMFC that may be devolved to the subsidiary is the Community Mortgage Program (CMP), considered the government’s flagship program for home acquisition by the underprivileged urban poor.

Also proposed for inclusion within the scope of the housing subsidiary is the implementation of the Development Loan component of the Abot-Kaya Pabahay Fund created under R.A. 6846 and amended by R.A. 7835.

"This is part of the recent program and policy initiatives of Secretary Defensor to make NHMFC’s socialized housing programs more responsive to the needs of the various stakeholders in the informal housing sector, " Salud said.

The move is also seen by housing observers as an effort to differentiate NHMFC’s social housing functions as a precursor to the eventual corporate restructuring of NHMFC into a secondary mortgage institution.