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Globe Asiatique ‘scam’ fallout hurting developers

S eptember 12, 2011 [ ]

Housing developers catering to the middle- to low-income families are hurting from tighter rules on home loans aimed at preventing a repetition of the Globe Asiatique borrowing scandal.

Take-out from the Home Development Mutual Fund (Pag-Ibiog Fund) has dropped to P2.4 billion a month, from roughly P4 billion a month last year, an official of the Subdivision and Housing Developers Association (SHDA) said.

"In terms of units sold, it is down to 3,500 units per month from 5,000," Manuel Crisostomo, SHDA presdent, said.

Globe Asiatique of Delfin Lee has been accused of taking out loans from Pag-Ibig using fictitious home buyers.

Crisostomo said it is unfortunate that legitimate developers are being penalized for the abuses of a few.

"Globe Asiatique is not a member of SHDA," said Crisostomo.

Following the Globe Asiatique fiasco, Pag-Ibig started requiring borrowers to submit additional requirements such as three character references and proof that 40 percent of income as shown in the tax return is enough to cover monthly amortizations.

Crisostomo said the new requirements have affected even loans that developers had already screened, including overseas Filipino workers who had been deployed before the new rules took effect.

Crisostomo said industry leaders are in discussions with Pag-Ibig for the revision of rule to "50 to 60 percent of formal income" as buyers may have multiple sources like "OFW-assisted" buyers.

Crisostomo said about 65 percent of home buyers depend on Pag-Ibig for financing.

He also complained about the delay in the releasing of documents from the Land Registration Authority.

The process used to take days. Now it takes more than three months.

Slower processing was blamed by the LRA on the ongoing computerization of its records of transactions.

"The long and extended transaction time adds to the burden of every Filipino family wishing to finally have a home to call its own. Instead of being able to move into their new homes immediately, these families have to continue paying rent for their current homes," he said.

Crisostomo said if the problems continue, the housing sector risks losing supply of units as some developers have already put construction on hold.

"For next year, there may be less and less units available," he said.

Two weeks ago, the Department of Justice recommended the filing of syndicated estafa charges against Lee and other Globe Asiatique officials.

The DOJ alleged that Lee and his companions defrauded the government and private individuals through the use of ghost borrowers who obtained housing loans worth P6.653 billion from Pag-Ibig.

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