Implementing Rules and Regulations on the Restructuring of Delinquent Housing Loans

April 2, 1998

IMPLEMENTING RULES AND REGULATIONS ON THE RESTRUCTURING OF DELINQUENT HOUSING LOANS AND CONDONATION OF PENALTIES PURSUANT TO R.A. 8501 KNOWN AS THE "HOUSING LOAN CONDONATION ACT OF 1998"

(As approved by the Social Security Commission under Resolution No. 260 dated April 2, 1998 and extended under SSC Resolution No. 732 dated September 8, 1999)

I. WHO ARE QUALIFIED

1. All housing loan borrowers who are delinquent or otherwise, in arrears in the payment of their housing loan obligations with the SSS, including the following:

1.1 Delinquent borrowers who failed or refused to pay their monthly amortization due to structurally defective or substandard housing units and or subdivisions lacking in basic amenities such as water, light, drainage, good roads and others and as required by law.

1.2 Housing loan borrowers whose mortgages have been foreclosed and the certificate of sale registered but the title is not yet consolidated in the name of the SSS.

1.3 Housing loan borrowers whose loan terms have expired.

1.4 Heirs of deceased borrowers with unpaid balance after application of the proceeds of the Mortgage Redemption Insurance.

II. WHO ARE DISQUALIFIED

1. Borrowers and/or their successors in interest who committed violation of the terms and conditions of the mortgage contract other than payment default.

2. Borrowers who have availed of any previous condonation program from any government institution or agency involved in the National Shelter Program.

III. TERMS AND CONDITIONS OF CONDONATION AND RESTRUCTURING

1. The availment period is from March 08, 1998 to March 31, 2000.

2. All penalties shall be condoned upon full payment of arrears.

3. In the event that the borrower is able to pay only part of the arrears, which should not be lower than 10% of the arrears, the portion of penalties to be condoned shall be equal to the percentage of the arrears paid.

4. After partial payment and condonation of penalty, the arrears in principal and interest, the Mortgage Redemption. Insurance (MRI) premium and Fire Insurance (FI) premium, if any, and the outstanding principal shall be restructured and amortized monthly for the remaining term of the loan. Subsequent MRI and FI premiums shall be billed separately.

5. In the case of housing loan borrowers falling under 1.2 and 1.3 of paragraph I of these RULES, the loan shall be fully paid on or before March 31, 2000 while those falling under 1.4 of paragraph I of these RULES, the maximum restructuring period or term shall be five (5) years.

6. The term of payment may be extended up to five (5) years but not beyond the borrower's age 70, if the remaining term is less than five (5) years.

7. The restructured loan under these RULES shall be subject to the same interest rate as the existing loan. However, if the loan carries two (2) or more interest rates, it shall be subject to the interest rates provided for under SSC Res. 708 dated August 10, 1994, as follows:

Amount	Interest Rate
P150,000 and below	9%
Over P150,000 up to P225,000	12%
Over P225,000	16%

8. The maximum amount covered by the Mortgage Redemption Insurance (MRI) shall be that of the original loan or of the total obligation at the time of death whichever is lesser.

9. Any unpaid amortization for principal and interest after due date shall bear an interest equal to the interest rate of the restructured loan and shall be subject to a penalty of 1% per month.

10. Any default in the payment of at least six (6) monthly amortization on the restructured loan shall make the entire restructured obligation due and demandable. This will subject the mortgage to immediate foreclosure pursuant to the original mortgage contract and the supplemental/amended mortgage contract or to the registration of the certificate of sale/consolidation of title, as the case may be.

11. If presently employed, the borrower shall submit a salary deduction scheme in the payment of his amortization approved by his employer. However, if the borrower is not able to get the approval of his employer or is unemployed, said borrower shall enroll in the Auto Debit Arrangement scheme of the SSS.

12. The borrower or the legal heirs shall be required to execute a supplemental/amended mortgage contract and an amended promissory note with the SSS incorporating the terms and conditions provided in these RULES.

IV. PROCEDURES

The Chairman, President and CEO of the SSS shall issue the rules and procedures that shall govern the requirements, processing and actions on applications for condonation of penalties in accordance with the preceding RULES.

 

(SGD.) CARLOS A. ARELLANOChairman, President & CEO