Question & AnswerQ&A (HDMF Circular No. 356)
Dacion en Pago is a mode of extinguishing the debtor's obligation whereby a property is alienated to the creditor in satisfaction of a debt in money, specifically referring to the conveyance of the mortgaged property by the borrower to Pag-IBIG Fund in satisfaction of his outstanding housing loan obligation.
A borrower whose housing loan account is in default due to incapacity to pay the loan obligation can avail of the program, provided that all collection efforts have been exhausted prior to application and the conditions set forth in the guidelines are met.
The objectives are to allow borrowers to pay loan obligations via property conveyance, expedite consolidation of mortgaged properties, reduce litigation expenses, and enable immediate disposal of properties to save maintenance costs, prevent depreciation, and aid liquidity of the Fund.
No, the property must be free from any lien or encumbrance except those made in favor of Pag-IBIG Fund.
The Certificate of Sale (COS) related to the auctioned property must not yet be registered before the application for Dacion en Pago can be approved.
The Dacion en Pago is treated as full payment of the borrower's outstanding loan obligation with Pag-IBIG Fund.
The borrower must vacate the property and submit all necessary requirements within 30 calendar days from the Letter of Intent submission.
The member's TAV is applied to the outstanding loan balance prior to the execution of the Deed of Dacion en Pago, except when the appraised value covers the loan obligation or a prior TAV offset was made for arrearages.
The appropriate level of signing or approving authorities based on the borrower's outstanding loan obligation approve the application.
If the borrower fails to comply within 30 calendar days, Pag-IBIG Fund may endorse the property for foreclosure or continue foreclosure proceedings.
Generally no; a borrower subject to Dacion en Pago is no longer eligible for another housing loan unless approved under meritorious conditions set by Pag-IBIG Fund guidelines.
All expenses, including taxes for consolidating the title, shall be paid by the Fund.
The borrower must execute a Deed of Dacion en Pago which transfers ownership of the mortgaged property to Pag-IBIG Fund in satisfaction of the loan.