Conditions for Condonation of Penalties
- Penalties are condoned after full payment of all due arrearages including principal and interest.
- Condonation also applies upon approval of loan restructuring application.
Restructuring and Loan Term
- Partial payments lead to restructuring of unpaid arrearages within remaining loan period or up to ten years, whichever is longer.
- Borrower’s age at loan maturity must not exceed 65 years.
- Restructured arrearages to be paid along with scheduled amortizations under the original loan terms.
Application of Pag-IBIG Savings (Total Accumulated Value - TAV)
- Borrowers with outstanding multi-purpose loans (MPL) can apply up to 40% of TAV against housing loan balance if not previously used.
- Borrowers without MPL can apply full TAV to loan balance but eligibility for MPL resumes only after two years.
Interest Rate on Restructured Loans
- Restructured loans retain the interest rate of the original loan.
Effect of Default on Restructured Loans
- Total outstanding loan becomes immediately due if borrower defaults.
- Accounts with arrearages of six monthly amortizations are subject to automatic foreclosure or cancellation.
Payment Procedures for Borrowers
- Government service borrowers must remit payments via salary deduction.
- Private sector borrowers required to remit via salary deduction if possible; otherwise, post-dated checks on annual basis are accepted.
- Retirees from both sectors must issue postdated checks annually; accommodation checks accepted.
Procedures for Availing Condonation and Restructuring
- Submission of completed application form and updated statement of account at any Pag-IBIG NCR Branch or Regional Office.
- Option to apply Pag-IBIG savings/TAV to reduce loan restructuring amount.
- Restructured arrearages treated as additional loan covered by amended Loan Market Agreement (LMA) and new Promissory Note (PN).
- Amendments to LMA require signing by borrower (and co-borrowers if applicable), with annotations on Transfer Certificate of Title (TCT) at borrower’s expense.
- Payment of fees: P200 processing fee, first year's mortgage redemption/fire insurance premium, registration, annotation, and notarization costs.
Deadline for Availment
- Applications for condonation of penalties must be filed no later than March 31, 2001.
Continuation of Other Provisions
- Other provisions of the Rules and Regulations implementing R.A. 8501 remain in full force if not inconsistent with these amendments.
Effectivity
- Amendments take effect fifteen days after publication in a newspaper of general circulation.