Question & AnswerQ&A (Acts No. 4070)
The main purpose of Acts No. 4070 is to amend Section Two of the Usury Law (Act No. 2655), further regulating the maximum interest rate and related charges on loans secured by a mortgage on registered real estate.
The maximum interest rate allowed is twelve percent (12%) per annum, including commissions, premiums, fines, and penalties.
Yes, building and loan societies may charge a premium not exceeding one percent (1%) per annum on such loans, renewals, or forbearance as authorized by relevant laws.
The premium must be divided into twelve monthly quotas each year and collected at the rate of one quota for each month of the borrower's contract.
It regulates loans, renewals, or forbearance secured in whole or in part by a mortgage upon real estate with a duly registered title, or by any document conveying such real estate or an interest therein.
No, the limitation applies specifically to loans secured by a mortgage on real estate with a duly registered title or documents conveying such interest.
Charges include commissions, premiums, fines, and penalties related to the loan, renewal, or forbearance of money, goods, or credits.
All acts or parts of acts inconsistent with the provisions of Acts No. 4070 are repealed as per its repealing clause.
The Act took effect upon its approval on October 12, 1933.
Forbearance refers to the postponement or delay of the payment of a loan, which is treated similarly to the loan or renewal in terms of allowable interest and charges under the law.