Last November 4, 2017, I attended a Pag-IBIG seminar for the housing loan. I was asked to present a photocopy of one of my government IDs. Then I was asked to affix my signature on a registration sheet. Afterwards, I was ushered into one of the conference rooms with a Borrower’s Validation Sheet (Pag-IBIG Form HQP-HLF-058) attached to the photocopy of my ID and which contains information relevant to the housing loan.
It looks like I will not be paying for my monthly contributions the way I used to before – at “Bayad” or Business Centers inside the mall -- because I will have an upgraded monthly savings which comprises of my monthly amortization of Php xxxx.xx plus regular monthly contribution plus additional contributions plus insurance premiums. A Pag-IBIG member who has a monthly contribution of Php 200.00 is capable of a housing loan worth Php 500,000.00 so that if the member is granted a loan greater than that amount, any excess of Php 100,000.00 will be equivalent to an additional contribution worth Php 50.00 (so in my case, I will have an additional contribution of xxx.xx).
Additional contributions will be added to the Total Accumulated Value (TAV) of the member. More contributions mean more dividends. Payment must be at a Pag-IBIG branch office because the loan applicant or member-borrower can opt to either have the payment be applied to the principal payment or serve as an advanced monthly amortization. The former implies that there is a chance that the term will be shortened – for instance, a 30-year housing loan may be reduced to a 10-year loan – while the latter is associated with an absolute zero-penalty housing loan.
The member-borrower’s insurance coverage is termed as the Mortgage Redemption Insurance (MRI) otherwise known as Sales Redemption Insurance while the property has a Fire Insurance. With MRI, the member-borrower must not die due to unnatural causes like suicide or death due to self-inflicted hunger strike as the case may be as natural death, which is honored as an acceptable cause of death of the principal buyer, is death attributed to cardiovascular diseases and cancer – both of which are considered as pre-existing conditions that may nullify an applicant’s request for a healthcare coverage. It was not discussed, however, if such combinations as falling from a flight of stairs due to cancer as stipulated in one medical journal article that I have read, can be considered as a natural death. At the time of death and the member-borrower is found to have arrears (penalty), MRI claims will be released after said arrears have been fully paid.
Other causes of death include “acts of God” such as what happens when the owner becomes thoroughly washed out lifeless by floods due to a storm surge, or dies because the house collapses due to an earthquake. When this happens, the spouse can claim the MRI cash payout, have the property as fully paid, and be capable of both a Home Improvement Loan and a Calamity Loan (if the Local Government Unit declares the area in a state of calamity).
This seems to answer why many homeowners would rather choose to not leave their homes while local government officials tend to do everything so as to evacuate their constituents to “safe places”. It seems that purchasing a “hurricane glass”, which was popularized by Ms. Jennifer M, while staying in the unit is a good option. MRI becomes effective once the loan gets to be approved until it becomes fully paid. Insurance premiums are included in the revised monthly savings as I pointed out above.
The interest rate of each monthly amortization is subject to re-pricing. With the Affordable Housing Program that each member-borrower may participate in, re-pricing may occur every ten years. I am not sure if that is the maximum period that may be granted but this means that the interest will be computed every ten years and is highly dependent on Foreign Exchange (FOREX) rates or dollar: peso values.
For the first 24 months, the buyer pays directly to the developer because the developer has a Collection Servicing Agreement with Pag-IBIG.
Late payments will have a penalty of 1% of the amount due and failure to pay monthly amortizations for three consecutive times means that the loan account will be have a default status.
Twenty-four (24) months after the housing loan proceeds have been released (loan takeout) – which is equivalent to saying that the equity owed to the developer has been fully paid prior to this phase --Contract-To-Sell (CTS) accounts will be converted to REM (I do not know what this acronym stands for but I’m excited to find out what this means soon) accounts which means that the borrower finally receives the title of the property. Within 18-24 months and with zero arrears plus the real property tax (known as “amilyar” in the Filipino dialect) shouldered by the developer, the member-borrower is likely to have a property title and the homeowner may now avail of the Home Improvement Loan with proceeds that can be directly applied to the property loaned through Pag-IBIG. Before the property is touched structurally, the owner must ask permission from the developer first.
After 24 months, the real property tax will be under the care of the homeowner. Receipts of tax payments must be kept and submitted to the Pag-IBIG Fund. The deadline for the submission of tax documents is every 30th day of June per year. Failure to pay for the real property tax on time means penalty. The worst scenario would be that the Municipal Government will sell the property in order to “settle the borrower’s tax delinquency”. Once the property is foreclosed, the homeowner’s only option is to leave the property with only the clothes that he or she is wearing -- an option that seems to validate why many prospective house-and-lot buyers are most likely to sell their scrap and quit playing craps that involve prized gifts such as a personal keyboard and a classical guitar and part with old appliances and furniture in exchange for cold cash which may be used to pay for monthly amortizations.
Once the member-borrower has moved in, minor adjustments may be done. These include anything that has to do with partitions. One may have as many as ten rooms at the second floor – and we are talking about 36 square meters here. Major constructions must be avoided if the title is not yet received.
After the takeout date, the property may be rented out as a business establishment. But this is not the true purpose of the Pag-IBIG Fund. The true nature of the Fund is to enable its members to own a house and lot unit while staying in it and “renting” the property while avoiding any possibility of foreclosure. If I find myself at the brink of having to entertain such a thought, I hope that there will be someone kind enoguh to award to me a broker’s license and invite me to earn a commission equivalent to my arrears. All will be well. I hope so.
I remember that in the past I used to hunt for foreclosed properties. It was quite a temptation because of the less amount of money that can be shelled out if one would buy such treasures. I would interview owners of these properties and each time I did the effort, I could glean from those frozen eyes the sadness inherent in knowing that after they saved and toiled hard to make the property their own, it would just be given back to the government. I cannot summon enough courage to do that now – from everything that I and my families – both virtual and genetic and lawful – have gone through to have this journey with me. Attempting to buy a foreclosed property is like being engaged in a contract with a client who wants me to work on an unfinished data matrix.
Having been an apartment dweller for years made me dig into mechanisms by which I may protect myself and my family now that we are in transition. Renting an apartment is one story. Trying to move out of the cave is another story fraught with subliminal torment (ah, I won’t forget how each day I have to fight against all kinds of smoke – from fried “tuyo” to the darkest carburator offshoot imaginable -- thrown to my window) from business individuals and from their comrades who think that I and my family who paid a one-month advanced payment and two months deposit are robbing them of their humanity now that we are consuming our savings.
Fortunately I found this online resource where I got relevant information that has to do with seeking legal aid that is affordable. I just need to submit my Income Tax Return and this will serve as their basis in computing how much fees I can shell out if the need arises. As for evidence, I have much.
But I hope it does not come to this point. I personally do not favor disputes of any sort. I am in favor of communicating to this people that I am moving out because I have been working my ass off for years and was saving in a mutual fund since 2003 which makes me qualified for this benefit and I have a legal business to declare to vouch my capacity for such a feat.
I am self-employed because I am doing business and with my earnings I am capable of paying for my taxes and if I will have more fortunes in the future then I will hire them to construct add-ons to the property -- that is, if the Home Improvement Loan will be approved.
If they kill us now with all of these uninhibited and unnecessary gases, then who will hire them in the future? Why will it be kind to wage a nuclear war against us now that we are about to have our dream house come alive?