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HOME DEVELOPMENT MUTUAL FUND
Corporate Headquarters
Petron MegaPlaza
358 Sen. Gil Puyat Ave.,
Makati City
HDMF Circular No.~
TO:
SUBJECT:
ALL CONCERNED
ADDITIONAL AMENDMENTS TO HDMF CIRCULAR NO. 259
Pursuant to the authority granted to the Senior Management Committee in Item
No. XI of HDMF Circular No. 259 to amend, modify or revise said guidelines, the
following policies amending certain provisions of the said guidelines are hereby issued:
A. INSPECTION OF UNITS
Alongside the inspection of units with corresponding loan applications, developers
may request for the advance inspection of other completed units in his
subdivision/condominium
project; provided, a written request is submitted to the
Fund and the corresponding inspection/appraisal fees are paid.
B. RETENTION FOR UNDERTAKINGS
The retention for the developer's undertakings on lacking documents and
deficiencies in the provision of utilities shall be released to him upon compliance with
the said undertakings, except if there is an overdue buyback obligation. In such a
case, the retained amount shall be applied to the developer's overdue buyback
obligation.
C. CONVERSION OF CTS ACCOUNTS TO REM
The following provisions relating to Conversion of CTS accounts to REM are hereby
amended and shall read as follows:
1. Substantial Compliance
The last paragraph of Item II-A Section 2.6
"A developer who is able to submit a copy of proof of payment to the BIR
(for Expanded Withholding Tax and Documentary Stamp Tax) and the
City/Municipal Assessor's Office (for Transfer Tax) shall be deemed as
having substantially
complied with the conversion
requirement. The
original receipts must be presented for authentication purposes.
Within thirty (30) working days from presentation of such proof, the
developer must submit a copy of the Certificate Authorizing Registration
(CAR) to the Fund. In case there are delays on the issuance of the CAR on
the part of the BIR, the developer shall submit a report to the Fund relative
to Ithe affected accounts.
Within fifteen (15) working days thereafter, the developer must also submit
a copy of proof of payment to the Registry of Deeds."
2. Warranty on Conversion of CTS accounts to REM
Item V-H
"The developer shall convert the security for eligible accounts from CTS to REM
but it shall not go beyond the 24th month of the seasoning period for
Window 1 and Window 2 accounts, or 36th month of the seasoning period
for Window 1 (Elite) accounts."
3. Conversion Period
Item VII-B Sections 1 and 2
"The developer shall begin converting eligible CTS accounts to Real Estate
Mortgage (REM) on the 18th month from date of loan takeout. In the case of
Window 1 (Elite), conversion shall commence on the so" month from date of
loan takeout. The developer may convert the CTS account earlier than the
18th or 30th month from loan takeout but it must be completed not later than
the 24th or 36th month of the seasoning period, whichever is applicable.
Conversion shall be reckoned from the release of the documents
necessary for conversion."
4. Assignable Instruments in lieu of Retention
Item VII-C Section 4
"In case the developer opted to use other instruments (such as Certificate of
Time Deposit, Pag-IBIG Housing Bonds, Trust/Escrow account, government
securities, etc.) instead of retention for conversion purposes, the Fund shall
process the release of the assigned instrument to the developer only upon
his compliance with the following:
4.1.
Presentation of the notarized Deed of Absolute Sale;
4.2.
Issuance of another assignable instrument or cash bond to
replace the one that will be released, in case the assignable
instrument covers several accounts with different conversion
periods. The new instrument or cash bond must be equivalent to
the retention of the remaining CTS accounts that are not yet due
for conversion. The CTS accounts covered by the new instrument
or cash payment must be the same as the remaining accounts
covered by the instrument to be released.
4.3.
Execution of a Deed of Assignment of the instrument
the Fund, in case a new instrument is used;
in favor of
Within seven (7) working days from compliance with the required documentation,
the assigned instruments shall be released to the developer or his representative
upon presentation of a duly notarized authorization letter."
5. Item VII-D Section 1.1
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If the account is still not converted at the end of the seasoning period, the
developer may request for extension to complete the process of
conversion. He shall not be required to buyback the account and shall be
granted the extension, provided the following conditions are met:
5.1.
The account subject of conversion is updated;
5.2.
The developer has already paid the appropriate taxes before the BIR
and the City/Municipal Treasurer's Office.
However, the extension will .depend on what stage of conversion the
account is in. It shall be reckoned from the expiration of the seasoning
period. As a consequence of extension, the developer's buyback guaranty
shall likewise be extended in the same manner.
D. BUYBACK OF ACCOUNTS
1. Item VIII-E Sections 1 and 2 shall be amended, and shall read as follows:
"The buyback value to be charged to the developer shall consist of the
outstanding principal balance, unpaid interest and penalties at point of default or
receipt of Notice of Buyback due to breach of warranties, whichever is applicable.
1.1 The buyback value shall likewise bear an interest at the rate of 8.5%
per annum computed from the date of default or receipt of Notice of
Buyback due to breach of warranties, whichever is applicable, up to
the actual date of settlement. No interest will be charged beyond the
buyback period.
1.2 The buyback value shall be paid within ninety (90) days from receipt of
Notice of Buyback in case of default, or within fifteen (15) days from
receipt of Notice of Buyback for breach of warranties.
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1.3 A penalty shall be charged equivalent to 1/20 of 1% of the amount due per
day of delay from the expiration of the prescribed buyback period up to the
actual date of settlement"
2. The remedies available to the developer, as provided in Item VIII-D of Gir. 259
(borrower's updating and replacement of accounts), shall only be applicable to
accounts that are taken out under Cir. 259 but not to accounts taken out under
Gir.287.
3. Full updating by the borrower must be a one-time payment of all arrearages.
4. If after the developer has already bought back the GTS account, the memberborrower signified his intent to update his account within the gO-day buyback
period, the developer shall be entitled to a refund of the buyback value previously
paid. However, the Fund shall return said amount only after the memberborrower has fully updated his account.
5. In case of failure of the developer to buyback the account or failure to avail of any
acceptable remedies within the specified 90-day grace period, HDMF shall
automatically offset the total amount due against subsequent takeout proceeds
or from any amount due the developer, if any, within five (5) calendar days from
the date the 90-day grace period expires. Similarly, offsetting shall be carried out
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within five (5) calendar days from expiration of the 15-day grace period given to
the developer in case the call for buyback is due to breach of warranties.
6. The developer may file an appeal to the Group Vice President regarding
accounts for buyback within five (5) working days from receipt of Notice of
Buyback/Breach of Warranties only if the issuance of the said notice or the
computation of the buyback value was arrived at in disregard of HDMF policies or
procedures. The issue must be resolved before the expiration of the ninety-day
or fifteen-day period, whichever is applicable.
E. BUYB ACK GUARANTY OF ACCOUNTS TAKEN OUT UNDER HDMF CIRCULAR
NO. 287
Accounts that are taken out under HDMF Circular No. 287 shall no longer be
covered by the developer's buyback guaranty, except in cases of breach of
warranties.
F. EFFECTIVITY
These guidelines takes effect immediately.
~~;4
ATTY. DARLENE MARIE B. BERBERABE
Chief
ExeCUlivefr
Makati City,
o_c_t_o_be_r_2_B __
, 2011
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