Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City, Metro Manila
THIRTEENTH CONGRESS
First Regular Session

HOUSE BILL No.__267

INTRODUCED BY HONORABLE PROSPERO C. NOGRALES

EXPLANATORY NOTE

The National Home Mortgage Finance Corporation (NHMFC) as the major
government mortgage institution has made available 185,000 housing units classified as
follows:

P180,000 — Socialized Housing at 9% interest
225,000 - Economic Housing at 12% interest
375,000 ~ Economic Housing at 16% interest

Out of the 185,000 total borrowers, only around $5,000 have updated their loan
payments; the rest have defaulted due to the economic crisis faced by our country
beginning the last decade. Hence, Republic Act No. 8501 otherwise known as the
“Housing Loan Condonation Act of 1998” was enacted to rescue the National Shelter
Program of the government by condoning the penalties on all outstanding/delinquent
housing loan accounts with any of the government institutions and agencies involved in
the National Shelter Program. As of today, only about 37,000 out of the delinquent
96,000 borrowers availed of the provisions of Republic Act No. 8501. The other
borrowers are given until December 31, 2001 to avail of the condonation offered by said
republic Cat No. 8501. in the meantime, those who availed of the condonation under
republic Act No. 8501 were allowed to restructure their loan and pay the same within the
remaining period of the loan. However, due to another surge of crisis, they were still

unable to comply with the terms and conditions of their restructured loan agreement


Some of these mortgages have been foreclosed and the others are now facing foreclosure
proceedings. The other borrowers who have not updated their obligation for at least three
(3) months may also be foreclosed at any time at the option of the National Home

Mortgage Finance Corporation.

‘The same is true with the other government institutions and agencies involved in
the National Shelter Program such as the National Housing Authority (NHA),
Government Service Insurance System (GSIS), Social Security System, and Home

Development Mutual Fund (PAG-IBIG Fund).

This situation is most alarming as while the government and the private sector are

launching new housing projects, the present beneficiaries of National Shelter Program are

on the verge of being thrown out of their homes after a short tenure. Thus, this Bill is
being filed to give a relief to the underprivileged citizens of our country until such time
that our economic conditions improve hopefully within three (3) years from today. After
all, it is the policy of the State to provide for an equitable land tenure system that shall

guarantee security of tenure of beneficiaries.

Immediate approval hereof is earnestly sought.

PRPSPERO C. NOGRALES
first District, Davao City


Republic of the Philippines
HOUSE OF REPRESENTATIVI
Quezon City, Metro Manila

Thirteenth Congress

First Regular Session

HOUSE OF REPRESENTATIVES

267

House Bill No.

Introduced by: Honorable Prospero C.

AN ACT
‘TO ESTABLISH A SOCIALIZED AND LOW-COST HOUSING LOAN
RESTRUCTURING PROGRAM, PROVIDING THE MECHANISMS THEREFOR,
AND FOR OTHER PURPOSES.

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Title. = This Act shall be known as the “Socialized and Low-Cost
Housing Loan Restructuring Act of 2004.”

SECTION 2. Restructuring of Delinquent Socialized and Low-Cost Housing Loan
Accounts. - In keeping with the Constitutional mandate for the State to undertake a
continuing program of urban land reform and housing that will make available at affordable
cost decent housing and basic services, there is hereby established a Socialized and Low-Cost

Housing Loan Restructuring Program. Under this program:

a) FOR THREE YEARS FROM THE EFFECTIVITY OF THIS ACT, all socialized
housing loans or loans amounting to Two Hundred Twenty Five Thousand Pesos
(P225,000.00) and below and all low-cost housing loans or loans amounting to
over Two Hundred Twenty Five Thousand Pesos (225,000.00) but not exceeding
Five Hundred Thousand Pesos (PS00,000.00) with any of the government
financing institutions and agencies involved in the National Shelter Program


b) (NSP), including but not limited to, the Government Service Insurance System
(GSIS), Social Security System (S
(HDMF), National Home Mortgage Finance Corporation (NHMFC), Home
Guaranty Corporation (HGC), and the National Housing Authority (NHA) that

), Home Development Mutual Fund

have at least a six-month unpaid monthly amortization are hereby declared
covered by the benefits of this restructuring program notwithstanding that the
same account has availed of the benefits of a previous restructuring of
condonation program an [no matter whether or not] EVEN IF the annual total
family income of the borrower-applicant exceeds Three Hundred Thousand Pesos
(P300,000.00)

©) an application for restructuring shall only be charged a processing fee which shall
be lower than those charged under previous restructuring or condonation programs
and no down payment shall be required for a borrower to apply for the benefits of

this restructuring program;

d) all penalties and surcharges shall be condoned upon filing of the restructuring
application under this Act: Provided, That all accrued interests shall be added to

the remaining balance of the principal, the aggregate of which shall be considered

as the new principal amount; Provided, further, That waiver of penalties,
surcharges and accrued interests for account subject of buy back or other default
arrangements with government financing institutions (GFls) under the National
Shelter Program of the government shall be left to the discretion of the respective

boards of such GFIs.

e) a borrower-applicant may be allowed to use the total accumulated value of his/her
membership contribution or savings with the GSIS, SSS, or HDMF to pay in full

or in part his/her housing loan;

f) the term of a housing loan account being applied for restructuring may be
extended for a period longer than its original term in order to lower the amount of
the monthly amortization to a maximum of One Thousand Five Hundred Pesos

(P1,300.00) for a period of three (3) years from the approval of the appl

tion,



after which, the monthly amortization will revert back to its original amount. The
unserviced portion ensuing from the three-year lowered monthly amortization
shall be paid on the last year of the term of the housing loan along with the last
monthly amortization. In the event that the borrower his/her property without need
of judicial proceedings;

g) in case of incapacity of a borrower, his/her legal heirs and successors-in-interest
may assume payment of his/her outstanding housing loan; and
h) loan restructuring under this Act may be availed of only once.
All corresponding penalties and surcharges which NHMFC may have pay its
funders as a result of the implementation of this Act shall be automatically adjusted

and condoned.

SECTION 3. Exclusion From Coverage. — In no instance shall the following

housing loan accounts be covered by this act:

a) any account without a single payment since takeout;

b) an account whose housing until has been abandoned by the borrower-owner for
more than two (2) years;

©) an account whose housing unit has remained unoccupied for a period of at least
‘two (2) years;

4) an account whose housing unit

is occupied by a third party other than the original
registered beneficiary; and

¢) an account that has been foreclosed, the title of which has already been
consolidated /transferred in the name of the GFI.

SECTION 4. Remedies Against Delinquent Accounts. ~ The GFls shall continue
to exercise their right to foreclose properties covered by accounts excluded in sub-
paragraphs (a) through (d) under Section 3 hereof or of delinquent accounts of
borrowers who shall fail to avail of the benefits of this Act and that such foreclosure
proceedings shall be exempt from publication and from the payment of filing fees,
capital gains tax and documentary stamp tax: Provided, That in lieu of publication,

posting of the date and place of auction shall be made in at least three (3) conspicuous


public places similar to that provided for under Act 3135: Provided, further, That
notice to the borrower at his last known address shall likewise be made.

SECTION 5. Declaration of Dividends. — The declaration of dividends of the
funds managed by the GSIS, SSS and HDMF shall be limited to their members who

have not availed of the restructuring program under this Act.

SECTION 6. Incentives for Prompt Payment of Monthly Amortization — Upon
the effectivity of this Act, all accounts whose monthly amortization are paid on time

shall be entitled to a reasonable discount on loan interest.

SECTION 7. Implementing Rules and Regulations - There is hereby created an
inter-agency committee headed by the Housing and Urban Development Coordinating
Council and composed of all the government institutions and agencies enumerated in
Section 2 hereof tasked to promulgate the implementing rules and regulations within
sixty (60) days from the effectivity of this Act.

SECTION 8. Congressional Oversight Committee. ~ There is hereby created a
Congressional Oversight Committee composed of the Chairman of the House
Committee on Housing and Urban Development and the Chairman of the Senate
Committee on Urban Planning, Housing and Resettlement, five (5) members of the
Senate and six (6) members of the House of Representatives. The members from the
Senate shall be appointed by the Senate President from among the members of the
Senate Committee on Urban Planning, Housing and Resettlement based on the
proportional representation of the parties or coalitions therein. The members from the
House of Representatives shall be appointed by the Speaker from among the members
of the Committee on Housing and Urban Development based on the proportional
representation of the parties or coalitions therein.

The Oversight Committee shall review and approve the Implementing Rules
and Regulations. It shall also review the performance of the GFIs and agencies

involved in the implementation of this Act.


SECTION 9. Repealing Clause. — All laws, executive orders, rules or
regulations, or any part thereof, inconsistent with any provisions of this Act are

hereby repealed or modified accordingly.
SECTION 10. Effectivity Clause. - This Act shall take effect fifteen (15)

days after its complete publication in the Official Gazette or in at least two (2)

national newspapers of general circulation,

Approved,