Tuesday, July 7, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
THE SENATE will invite Vice-President Manuel "Noli" L. de Castro, Jr. to explain the increase in interest rate for thousands of delinquent socialized, low-cost housing loans which were restructured.
The loans were transferred to a special purpose vehicle (SPV), whose incorporators included embattled Celso G. delos Angeles, Jr. of the failed Legacy Group.
A joint hearing of the Senate committee on urban planning, housing and resettlement and committee on accountability of public officers and investigations (Blue Ribbon) yesterday found out that the interest rate for 53,000 delinquent housing loans jumped to 14% annually in 2004 from 6% to 9% after they were handled by Balikatan Housing Finance, Inc.
The loans were initially auctioned by National Home Mortgage Finance Corp. (NHMFC) in 2004 to Deutch Bank Real Estate Global Opportunities (Global).
Balikatan was created as a joint venture firm by the NHMFC and Global, which resulted in higher interest rate, said Senator Francis Joseph G. Escudero who filed Senate Resolution 1094 that called for the probe.
Senator Rodolfo G. Biazon, housing committee chairman, said Mr. de Castro, chairman of the Housing and Urban Development Coordinating Council, "should be called to testify in the Senate" on July 15.
Mr. delos Angeles faces several complaints of fraud for dubious investment schemes employed by the shuttered Legacy-owned rural banks and pre-need companies which he founded. He was invited to attend the investigation yesterday but was absent without a reason.
During previous Senate inquiries on the collapse of the Legacy group, Mr. delos Angeles admitted he served as chairman of the NHMFC in 2004-2005 upon the recommendation of Mr. de Castro, the housing czar.
"We should address this issue knowing his [Mr. delos Angeles’] track record with Legacy," Mr. Escudero told reporters.
Mr. Escudero added unit owners were not informed of the higher rate. "That is the first issue which is not permitted under the law. Section 6, Article 1301 of the Civil Code says that subrogation of a third party requires the consent of the original parties. The SPV was done without the knowledge and consent of the debtors."
Mr. Biazon said that with the higher interest rate, the low-cost housing units were effectively converted to medium-cost dwellings.
Blue Ribbon chairman Senator Richard J. Gordon said the committee "will dig deeper" on the issue upon learning of the involvement of Mr. delos Angeles.
The panels want to identify how many units have been foreclosed and subjected to foreclosure proceedings due to higher interest rate, said Mr. Biazon. — Bernard U. Allauigan
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