Guidelines for Pag-IBIG Loan Restructuring

Applies to all delinquent housing loan borrowers with accounts at least three months in arrears, except Window 1 accounts.

Program begins January 1, 2012.
Penalty condonation available only until June 30, 2012.
Applications after June 30, 2012 eligible only for loan restructuring.
Delinquent borrowers who fail to apply shall be subject to foreclosure or CTS cancellation within 30 days of notice.

Only complete applications are processed.
Eligibility based on capacity to pay: monthly amortization not exceeding 40% of family’s Net Disposable Income (NDI).
Family income from relatives within specified civil degree counted; these relatives become co-borrowers jointly and severally liable.
Legal heirs’ capacity to pay requirement waived; non-member legal heirs must register and pay contributions.
Inactive borrowers must reactivate membership and update contributions.
Borrowers must update Real Estate Tax and pay one-year insurance premium.
CTS accounts meeting eligibility converted to Real Estate Mortgage (REM) upon approval; borrower pays conversion expenses.
Loan restructuring allowed only once per borrower.

Category A: 10% down payment of total arrearages for borrowers still within billing or pre-foreclosure stages, certain installment buyers, legal heirs after insurance and value application, surrendered accounts (dacion en pago), and specific program accounts.
Category B: 20% down payment from borrowers issued a Notice of Foreclosure with 30-day application period; includes multiple restructured accounts, abandoned units, or units occupied by third parties.
Category C: Borrowers exceeding 40%-NDI limit have loan amount adjusted, and must pay difference as down payment.
Dividends from Total Accumulated Value (TAV) can be used for past due payments or down payment.

Interest-bearing principal includes outstanding principal and principal arrearages, insurance premiums, real estate tax advanced by Fund, unpaid fees.
Non-interest bearing portion includes unpaid interest, uncondoned penalties, foreclosure and other expenses.
Foreclosure expenses added if foreclosure is in process before COS registration: filing fees, publicity, sheriff, notarial, attorney’s fees where applicable.
Cut-off date for computation is date of loan restructuring approval.

Maintained at rate prior to restructuring.
Accounts with two-interest rate structures converted to single interest structure at original non-prompt interest rate.
Special weighted average interest rates apply for certain loan amounts and multiple restructured loans.
Loans over P400,000 repriced every three years with specific limits on rate increases and borrower notice requirements.

Payable within 30 years but not exceeding difference between borrower’s present age and age 70.
For tacked loans, age of youngest co-borrower applies.
Monthly amortization must not exceed 40% of family’s NDI.

Borrower, installment buyer or legal heir must pay mandatory and upgraded membership contributions per original loan guidelines.
Arrearages in membership contributions must be updated or have a payment plan prior to loan restructuring approval.

Equal monthly installments covering principal, interest, insurance premiums, and obligations.
First payment due one month after restructuring approval.
Salary deduction as preferred payment method, with alternatives including post-dated checks, over-the-counter payments, accredited agents, auto-debit, or other systems.
Payments due on first working day after non-working days or holidays.
Payment application priority from membership contributions to principal.
Excess payments applied to cover deficiencies or principal balances.
Both membership contributions paid with loan payments if self-employed or unemployed.
Penalty for delayed payments at 1/20 of 1% per day delay.

Allowed in full or part without penalty.
Excess payments treated as future amortization or applied to principal at borrower’s request.

Default occurs after three consecutive missed payments or membership contributions.
Condoned penalties restored and become due along with outstanding balance and penalties.
Unpaid amounts continue accruing penalties and interest.
Member’s and co-borrowers’ TAV applied to outstanding loan before foreclosure.
If TAVs insufficient, Fund proceeds with foreclosure.
Option to assign mortgaged property via dacion en pago to settle obligation.

MRI/SRI coverage mandatory for principal borrower based on restructured loan amount.
External insurance required if loan exceeds P2 million or borrower’s age over 60.
Fire and allied perils insurance premiums based on original loan.
First-year insurance premiums paid upon loan restructuring approval.

Health Statement required for borrowers over 60 or loans over P2M, subject to insurance underwriting.
Execution of Restructuring Agreement and new Promissory Note consolidating original and restructured loans.
Co-borrowers must sign and consent.
Original Loan and Mortgage Agreement integrate by reference.
Deed of Revocation executed for CTS accounts with Notice of Cancellation within 30-day period.
Consolidation of loan ledgers and facilitation of title transfer and mortgage registration by the Fund; any excess costs borne by borrower.

Senior Management Committee may amend guidelines to further program objectives consistent with Fund’s mandate.

Previous inconsistent circulars, memoranda, rules, or issuances are repealed, amended, or modified accordingly.