Rules and Regulations Implementing Executive Order No. 281

2004

RULES AND REGULATIONS IMPLEMENTING EXECUTIVE ORDER NO. 281 PROVIDING FOR DEFERMENT OF EVICTION, FORECLOSURE AND CANCELLATION OF HOUSING ACCOUNTS AND THE FORMULATION OF AFFORDABLE RESTRUCTURING PROGRAMS DURING SUCH DEFERMENT

ARTICLE I

Title, Authority, Purpose, Construction and Scope

SECTION 1.  Title. — These rules shall be known and cited as the Rules and Regulations Implementing Executive Order No. 281, otherwise known as "PROVIDING FOR DEFERMENT OF EVICTION, FORECLOSURE AND CANCELLATION OF HOUSING ACCOUNTS AND THE FORMULATION OF AFFORDABLE RESTRUCTURING PROGRAMS DURING SUCH DEFERMENT".

SECTION 2.  Authority. — By virtue of Section 5 of Executive Order No. 281, the Inter-Agency Task Force, which is composed of the Secretary-General of the Housing and Urban Development Coordinating Council (HUDCC) as Chairman with the Presidents of the National Home Mortgage Finance Corporation (NHMFC), Home Development Mutual Fund (HDMF), Government Service Insurance System (GSIS), and Social Security System (SSS) and representatives from the Senate Committee on Urban Planning, Housing and Resettlement and the House Committee on Housing and Urban Development as members, is hereby tasked to promulgate the rules and regulations implementing the program, "PROVIDING FOR DEFERMENT OF EVICTION, FORECLOSURE AND CANCELLATION OF HOUSING ACCOUNTS AND THE FORMULATION OF AFFORDABLE RESTRUCTURING PROGRAMS DURING SUCH DEFERMENT."

SECTION 3.  Purpose. — These rules and regulations are formulated in recognition of the economic crisis, which has affected the paying capacity of housing loan member borrowers in the low income group, resulting in a number of them being delinquent in paying their monthly amortizations, to give temporary relief to the affected borrowers for them to be able to work out solutions to keep their homes, and to provide the SSS, GSIS, NHMFC, HDMF, NHA, HGC, HUDCC, non-government organizations, private sector and beneficiaries of the government shelter program with guidelines for the comprehensive implementation, participation and compliance with the program of providing for the deferment of eviction, foreclosure, and cancellation of housing accounts and formulation of affordable restructuring programs during such deferment.

SECTION 4.  Construction. — These rules shall be construed and applied in accordance with and in furtherance of the policy and objectives of the law. In case of conflict and/or ambiguity, which may arise in the implementation of these Rules, the concerned agencies shall issue the necessary clarification. In case of doubt, the same shall be construed liberally and in favor of the beneficiaries.

SECTION 5.  Scope. — These rules and regulations shall cover all delinquent housing loan accounts for cancellation and foreclosure, foreclosed accounts and consolidated accounts with all government agencies and institutions under the National Shelter Program such as: NHMFC, HDMF, NHA, HGC, SSS and GSIS.

SECTION 6.  Exclusion. — In no instance shall the following loan accounts be covered by these implementing rules and regulations:

a.  unoccupied housing units

b.  accounts with no single payment since take-out

c.  restructured accounts

d.  consolidated accounts which were already disposed through sale or rent-to-own scheme

e.  accounts covered by developers buyback guarantee

However, the SSS, GSIS, HDMF, HGC and NHMFC shall be allowed to include under the coverage of the program any exclusions enumerated in Section 6 from the implementation of this program provided it is permitted in their respective charters.

ARTICLE II

Definition of Terms

SECTION 7.  Definition of Terms. — As used in these Rules, the following terms shall mean as follows:

1.  Outstanding Balance — refers to total of principal, interest, penalties/surcharges, fire insurance premium (FIP), mortgage redemption insurance (MRI) premium, (If policy has not been lapsed, unpaid membership contributions, and foreclosure expenses (If the account is already foreclosed).

2.  Delinquent Borrowers — refers to those whose accounts are in arrears for at least six (6) months in the payment of their housing loan obligations including those who have not availed of any penalty condonation, those who have annual income of P300,000 and in arrears for at least 2 years, those whose loan terms have expired but whose mortgages have not been foreclosed, or if foreclosed, the certificate of sale is not yet registered and the heirs of deceased with unpaid balance after application of the proceeds of MRI.

3.  Arrears — refers to total unpaid principal, interest and penalties if not condonable plus unpaid MRI and FPI.

4.  Reconstructured amount — pertains to the new principal, which is equivalent to the sum of the principal and interest and penalties not condoned. DHIcET

ARTICLE III

Deferment and Restructuring of Delinquent Housing Loan Accounts

SECTION 8.  Deferment. — The eviction, foreclosure and cancellation of housing accounts including all proceedings in connection therewith, shall be deferred until 09 August 2004.

SECTION 9.  Restructuring of Delinquent Housing Loan Accounts. — In keeping with the intent and purpose of EO 281, there is hereby established a Delinquent Housing Loan Restructuring Program.

SECTION 10.  Coverage. — For six months from the effectivity of Executive Order No. 281 or until August 9, 2004, all housing loans with HDMF, NHMFC, HGC, SSS and GSIS, that have at least a six-months unpaid monthly amortization are hereby declared covered by the benefits of this restructuring program.

SECTION 11.  Minimum Payment Requirement to Restructure. — An applicant for restructuring shall only be required to pay the unpaid MRI/Fire insurance plus one-year advance premium of MRI/FI plus value-added tax.

SECTION 12.  Condonation of Penalties. — Subject to the existing guidelines of SSS, GSIS, NHMFC, HGC and HDMF, all applicable penalties shall be condoned 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.

Borrowers shall have the option to pay the equivalent of at least 10% of total arrears and/or outstanding balance net of applicable penalties if the applicant is qualified to avail of the penalty condonation program of SSS, GSIS, NHMFC, HGC and HDMF. The amount paid shall be applied to the restructured amount.

An 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 the required down payment, if allowed under their respective charters.

SECTION 13.  Computation of restructured balance. — The amount to be restructured shall be the outstanding balance net of applicable penalties condoned, MRI/FI premium if already paid and down payment, if any.

SECTION 14.  Affordable Loan Restructuring. — The following affordable schemes and remedies shall be adopted to bring down the monthly amortization, when applicable:

a.  Lengthening the term of a housing loan account being applied for restructuring

b.  Adoption of Graduated Amortization Scheme EIDTAa

c.  Adjustment of Interest Rate to the prevailing lending rates

d.  Allowing the legal heirs and successors in-interest of an applicant to assume payment of his/her outstanding housing loan

e.  Rent to Own for accounts not yet disposed through sale or Rent to Own Scheme

SECTION 15.  Requirements for Availment. — To avail of the restructuring program, an applicant shall submit the following requirements:

a.  Application form

b.  Authenticated/certified photocopy of real estate tax receipts for the quarter

c.  Certified true copy of the latest Income Tax Return

d.  Latest pay slip of principal borrower/awardee/co-maker and or buyer of rights

e.  Other documentary requirements that may be deemed necessary by SSS, GSIS, HDMF, HGC and NHMFC. cCTAIE

SECTION 16.  National Housing Authority (NHA). — The NHA shall extend the implementation of its existing restructuring and condonation program until 09 August 2004.

SECTION 17.  Restructuring Guidelines. — The SSS, GSIS, HDMF, NHMFC, and HGC shall issue their respective Restructuring Guidelines including additional exemptions referred to in Section 6 hereof within Thirty (30) days upon approval and publication of the IRRs and disseminate the same thereafter.

SECTION 18.  Monitoring of Compliance. — The HUDCC shall monitor the compliance by the concerned agencies and thereafter conduct continuing review and study of the implementation with the end in view of submitting recommendation of the genuine affordable restructuring program.

SECTION 19.  Separability Clause. — The provisions of these Implementing Rules and Regulations are hereby declared separable, and in the event that any such provisions are declared null and void the validity of all other provisions shall not be affected.

SECTION 20.  Effectivity. — These Implementing Rules and Regulations shall take effect fifteen (15) days after its publication in any two (2) national newspapers of general circulation. CAIaHS

 

(SGD.) VICE CHAIRMAN AMADO S. BAGATSINGOfficer-in-Charge, HUDCC