REAL STATE INDUSTRY PRACTITIONERS. Led by the by the National Real Estate Association Inc. (NREA) expressed support to Vice President Noli De Castro over the sale in 2004 of some 53,000 high non-performing housing loan accounts administered by the National Home Mortgage Finance Corporation, to an asset management company.

 

Jose V. Manalad, NREA chairman, said that it is sound business decision to sell for cash, even at a discount, distressed housing loans accounts form which no borrower repayments had been recovered for more than ten (10) years, saying that asset disposition of this type is a regular transaction by home financing institutions in the country.

Following the Asian financial crisis in 1997, when the banking industry accumulated a high enacted the “Special Purpose Vehicle (SPV) Law” giving incentives to financial institutions to encourage them to sell non-performing assets to SPV companies.

Manalad said that on top of the go signal to sale given by government finance regulatory agencies, the transaction was also approved by the SSS, GSIS and Pag-IBIG Fund, who hold interest on the 53,000 housing mortgages, which serve as collateral to the loans owed by NHMFC to the three funding agencies mentioned.

Following the mortgage sale, the delinquent borrowers who have reneged on their payment obligations, have started to pay and reactivate their accounts, knowing that they have more to lose if they continue to default, since the value of their home has risen;

The proceeds of the NHMFC mortgage sale was paid to SSS,GSIS and Pag-IBIG Fund, for relending to their members who borrow to buy their houses and lots, Manalad conclude.

 

 

 

Reprinted from PHILIPPINE DAILY INQUIRER   - Monday July 13, 2009