NHMFC expects to boost lending to informal sector

The National Home Mortgage Finance Corp. (NHMFC) has undertaken during the last three years, corporate realignment and streamlining of its operations, that if sustained further could lead to the operation of a secondary market for residential mortgages and restore funding access from the capital markets for housing finance, as well as boost home lending to the informal sector.

NHMFC president Angelico T. Salud reported that NHMFC has completed a work-out and clean-up of its some P41-billion mortgage portfolio, resulting in its recent sale of some 55,300 highly-delinquent residential mortgages, with outstanding principal balances of approximately P13.4 billion.

Having rid of its tranche of non-performing loans through such sale, NHMFC will have increased the collection efficiency of its remaining portfolio of good loans from 48 percent to 76 percent.

As a result of this, and in addition to improving its balance sheet, NHMFC has effectively enhanced the investment quality of its retained mortgage assets, which may be used later on for securitization to tap funds from the capital market into housing finance, Salud cited.

After futile efforts undertaken since 1996, or for some seven years, NHMFC was finally able to restructure in December 2003 its corporate loans with the SSS, GSIS and Pag-IBIG Fund, which were incurred in 1988-1995 and used solely by NHMFC to finance home lending to the respective members of the aforementioned agencies.

The favorable loan restructuring terms received have strengthened NHMFC’s servicing capability for the said loan portfolios, Salud pointed out.

Also during the last three years of President Gloria Macapagal-Arroyo’s administration, NHMFC undertook a number of radical program and policy changes in its Community Mortgage Program (CMP), the home financing program for the homeless informed settlers.

Because of these changes, CMP loans during the last two years reached record levels that were unprecedented in CMP’s 15 and a half years of operation.

Loans granted last year amounted to P615.5 million, comprising more than double the average yearly loan releases of P293.45 million attained since CMP was first launched in 1988. On the other hand, loans released during the last six months reached a total of P347 million, also a new record high, Salud concluded.

Meanwhile, local government units (LGUs) have overtaken non-government organizations (NGOs) and national government housing agencies, as conduits of housing loans for the urban poor under the government’s Community Mortgage Program, the home financing program for the homeless informal settlers.

In a message for the up-coming "Local Government Units and Private Sector Housing Conference," Salud reported that CMP loans originated by LGUs last year amounted to P211.75 million, comprising 34.4 percent of the P615.5-million total loans released in 2003.

National government agencies posted a P204.99-million share, equivalent of 33.31 percent while non-government organizations posted a loan share amounting to P198.7 million, comprising 32.29 percent of the total, Salud informed.

The housing conference, slated on July 29-30 will be conducted jointly by CREBA Social Housing Foundations; Dept. of Interior and Local Government; and by the Housing and Urban Development Coordinating Council.

Among the top LGU loan originators last year are the city governments of: Manila, with P80 million in CMP loans originated, comprising 37 percent; Marikina, P38 million, 18 percent; Quezon City, P22.4 million, 10.5 percent; Antipolo, P20 million, 9.4 percent; Pasig City, P13.7 million, 6.5 percent; Cainta, P11.9 million, 5.6 percent; Taguig, P8.5 million, four percent; Bacolod, P5.6 million; Caloocan, P 3.7 million; Sta. Ana Pampanga, P3.3 million; Cebu, P2.8 million; and the Rizal Provincial Government with P1.2 million.

"The local government units, upon realizing the housing potential for socio-economic development, have begun to take up their lead role in providing social housing for their constituents, as mandated under R.A. 7279, the Urban Development and Housing Act of 1992," Salud added.