At least 22,123 housing beneficiaries stand to lose their homes over the failure of the Pag-IBIG’s Home Mutual Development Fund to call the attention of the developers to convert the members’ contracts-to-sell to real-estate mortgages within the prescribed period pursuant to HDMF Circular No. 259.
In an audit report, the state auditors said the affected beneficiaries came from Pampanga’s San Fernando with 10,484 accounts, Metro Manila with 7,077 accounts, Cebu with 4,016 accounts and La Union’s with 182 accounts with an aggregate housing loan value of P14.4 billion.
The housing agency’s shortcoming caused the “exposure of borrower’s property ownership at risk, delay and difficulty in the redemption, foreclosure, and disposal of the properties, and non-recovery of the Fund’s investment in housing,” CoA said.
The delay in the real-estate mortgage conversion could be attributed to account endorsements, review of pre-signed documents, outsourcing, and the notarization of trust receipts and deeds of an undertaking, it added.
“Due to deficiencies noted, titles of the mortgaged properties have not yet been transferred in the name of the buyer-borrowers, hence, annotation of the real-estate mortgages could not be done by the register of deeds,” the report read.
HDMF Circular No. 259 stipulates a housing developer must convert an eligible contract-to-sell account to a real-estate mortgage from 18 months to 36 months from the date of loan release.
Without the real-estate mortgage, Pag-IBIG’s HDMF could cancel a deal with a developer and even foreclose a member’s property even if loan payments are made.
Moreover, the circular authorizes the Pag-IBIG’s HDMF to adopt remedial measures and impose sanctions against developers for overdue real-estate mortgage conversion through retention fee collections, suspension on the release of transfer certificate of titles and account buy-backs.
CoA also flagged the housing agency for undertaking “voluminous transactions” on real-estate mortgage conversion process and difficulties to obtain records from inactive developers.
“Thus, non-conversion of the accounts from contract-to-sell to real-estate mortgage is contrary to HDMC Circular No. 259 as amended and detrimental to the interest of the updated housing loan borrowers as their ownership over the property is exposed to risk,” its report stated.
“This would also result in the difficulty of foreclosure or disposal of the properties which would delay recovery of Fund’s investment in housing.”
