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COVERAGES

These guidelines shall apply to all Pag-IBIG housing loan borrowers who wish to restructure their accounts for the following purposes:

• To update or fully pay delinquent accounts;
• To shorten or lengthen the term of the housing loan.
• To avail of the two (2) interest rate structure provided under Section 4 of the Consolidated Guidelines of the Pag-IBIG Housing Loan Program (HDMF Circular No. 189-A) to housing loan borrowers whose accounts are updated.

Delinquent borrowers shall mean borrowers who are in arrears for at 3 months in the payment of their housing loan obligations with the HDMF, and shall include the following:

1. Delinquent borrowers who qualify for penalty condonation under Section 2 of RA 8501, i.e. borrowers who have not yet availed of any penalty condonation program from any government financial institution or agency involved in the National Shelter Program;
2. Delinquent borrowers who qualify for penalty condonation under Section 3 of RA 8501, i.e., borrowers with an annual income of not more than P300,000 whose accounts have been in arrears for at least two years, and who have defaulted on their loans due to justifiable reasons deemed as such by the HDMF Board of Trustees;
3. Delinquent borrowers who do not qualify for penalty condonation under Sections 2 or 3 of RA 8501;
4. Housing loan borrowers whose mortgages have been foreclosed, but the title has not yet been consolidated in the name of HDMF; provided the borrower fully pays all the costs and expenses incurred by HDMF relative to the foreclosure, sale and custody of the property or capitalizes these expenses over the term of the restructured loan;
5. Housing loan borrowers whose loan terms have expired;
6. Heirs of deceased housing loan borrowers with unpaid loan balance after application of the proceeds of the Mortgage Redemption Insurance (MRI);
7. Successors-in-interest of Pag-IBIG housing loan borrowers, herein defined as individuals who have assumed the original mortgage as supported by legal documents;
8. Group Land Acquisition and Development (GLAD) and other Homeowners’ Association (HOA) accounts;
9. Borrowers whose loans are secured by a Contract-to-Sell (CTS) including accounts which have been cancelled due to delinquency.

PENALTY CONDONATION

Pursuant to Sections 2 and 3 of RA 8501 or the "Housing Loan Condonation Act of 1998", all unpaid penalties of Pag-IBIG housing loan borrowers shall be condoned; provided that all due and demandable arrearages are restructured or fully paid.

1. Delinquent borrowers who have not yet availed themselves of any penalty condonation program from any government financial institution or agency involved in the National Shelter program shall be granted automatic condonation of penalties incurred up to December 31, 2002, as provided under Section 2 of RA 8501.
2. Delinquent borrowers who have previously availed themselves of a penalty condonation program from any government financial institution or agency involved in the National Shelter Program shall be entitled to a full condonation of penalties incurred up to the date of application for loan restructuring, provided the borrower meets the requirements under Section 3 of RA 8501.

ARREARAGES TO BE RESTRUCTURED

The amount to be restructured shall consist of the following total arrearages:

• Principal
• Interest
• Insurance Premiums
• Payments to the Housing Contributory Fund as of the date of application for loan restructuring
• Other Advances/Expenses
• Penalties and other Charges - for those who shall not qualify for penalty condonation

In case of foreclosed accounts, the amount to be restructured shall be the total outstanding loan balance as of the date of loan restructuring, plus foreclosure expenses.

The unpaid membership contributions shall be paid in cash or through a plan of payment not to exceed 2 years.

DOWNPAYMENT REQUIRED

1. A minimum of 10% of the total arrearages plus unpaid membership contributions to be paid prior to loan restructuring. The 10% downpayment shall be applied according to the following order of priorities:


• Arrearages on Insurance Premiums
• Interest and Principal



2. In case the borrowers fail to make the required downpayment, HDMF shall:
   
1. Apply at least 40% of the Total Accumulated Value (TAV) of the borrowers' savings to his total arrearages, if they have an outstanding Pag-IBIG Multi-Purpose Loan (MPL), and have not previously offset their TAV against their MPL; or
2. Apply the entire amount of the borrowers’ TAV to their total arrearages, if they have no outstanding MPL.

In case the TAV is not enough to fully cover the required downpayment, the remaining balance shall just be incorporated as part of the restructured loan.

The cut-off date for TAV offsetting shall be the date of filing of application for loan restructuring.

INTEREST RATE

Borrowers who shall update/restructure their loans shall be entitled to a two-interest rate structure whereby borrowers who shall pay their amortizations on or before the due date shall be charged a lower interest rate according to the following schedule:

In case the original loan is socialized housing loan, the restructured loan shall bear interest at 9%.

TERM OF THE RESTRUCTURED LOAN

1. For delinquent borrowers who do not qualify for penalty condonation under Sections 2 and 3 of RA 8501, the restructured loan shall be repaid over a period of 20 years or the remaining term of the original loan, whichever is longer.
2. The term of the restructured loan classified below shall be the remaining term of the original loan:
   
1. Delinquent borrowers who qualify for penalty condonation under Sections 2 and 3 of RA 8501;
2. Accounts covered by CTS Scheme which have been cancelled due to delinquency;
3. Accounts of housing loan borrowers with unpaid loan balance after application of the MRI coverage.
   
3. The term of the restructured loan classified below shall be a maximum period of 10 years, reckoned from the date of approval of the loan restructuring:
   
1. Accounts whose mortgages have been foreclosed;
2. Accounts whose loan terms have expired.

In no case, however, shall the term of the restructured loan exceed the difference between the borrower's age at the time of application for loan restructuring and age 65.

PERIOD OF AVAILMENT

Delinquent Pag-IBIG housing loan borrowers shall file their application for loan restructuring within 6 months from the date of receipt of the Notice of Demand from the Billing and Ledgering Department/Division during which time the cancellation/foreclosure proceedings shall be suspended by HDMF.

After the given period, HDMF shall enforce the appropriate legal action on the delinquent accounts.

FEES/CHARGES

Applicants for loan restructuring shall pay the following fees/charges;

1. A processing fee of P200.00 to be paid upon filing of the application;
2. First year’s premium for mortgage/sales redemption insurance to be paid upon approval of the application for loan restructuring.