GOVERNMENT HOUSING AGENCY OFFERS TO BUY RESIDENTIAL LOANS RECEIVABLES FROM COOPERATIVES

saturday, march 26, 2011

GOVERNMENT HOUSING AGENCY OFFERS TO BUY RESIDENTIAL LOANS RECEIVABLES FROM COOPERATIVES


Cooperatives that grant housing loans to its members can now sell these loan mortgages/receivables to the National Home Mortgage Finance Corporation (NHMFC), it was announced by the government home financing agency.

This way, the cooperative gets fully paid for the housing loan granted to its member/s and it is relieved of the risk for the said loan exposure.

"The NHMFC has a 'Housing Loan Receivables Purchase Program' (HLRPP), wherein NHMFC buys loans/mortgages/receivables from originating institutions, such as housing developers; government financing institutions; banks; COOPERATIVES, and corporate employers, who have a housing program," according to the NHMFC's published notice.

The types of loans that can be purchased by NHMFC are Contracts to Sell (CTS), and real estate mortgages (REM).

"These financing institutions can take advantage of the existing services of NHMFC and minimize the risk that they incur in issuing loans.

"At the same time, the government can provide the adequate support in ensuring that there is security in the flow of funds in the economy. Hence, we can expect that there will be affordable financing support for housing to Filipinos given this setup," the NHMFC emphasized.

An institution engaged in secondary mortgage market operations, NHMFC , buys residential mortgages from the primary mortgage market, comprising of public or private institutions that grants residential loans.

By buying these mortgages or housing loan receivables from these institutions, NHMFC assumes the risk on these assets. It then issues bonds and other securities against the real estate mortgages and loan receivables that NHMFC bought and holds.

The 'Fast Facts', including the entire 'Guidelines on NHMFC's Housing Loan Receivables Purchase Program' may be viewed/downloaded at http://www.nhmfc.gov.ph (END)

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