by VG Cabuag - October 30, 2015[ businessmirror.com.ph ]
LOW-COST housing developer 8990 Holdings Inc. on Thursday said it signed a memorandum of agreement with the Bank of the Philippine Islands for the purchase of P1 billion worth of in-house contract to sell (CTS) being handled by the developer.
8990 said in its disclosure to the Philippine Stock Exchange that BPI Family Bank will process the conversion of CTS handled in-house by the developer and turn it into a mortgage loan under BPI’s own housing program.
“The arrangement carries a limited recourse period of only two years. The actual date of purchase shall be on October 30, 2015,” the company said in a statement.
The recourse ends once the CTS is converted into a mortgage loan even before the two-year recourse period lapses, said Januario Jesus Gregorio III Atencio, the company’s president and CEO.
“The agreement with BPI Family is a significant milestone for 8990, as it signals the growing acceptability of house’s CTS receivables with the banking sector, paving the way for the creation of alternative housing finance in the private sector not only for 8990 but also for the entire mass-housing sector,” Atencio said.
He said the company will pursue similar arrangements with other banks and financial institutions in the near future.
For the first half of the year, the company said it had delivered 2,044 accounts to Home Development Mutual Fund, also known as the Pag-IBIG Fund, for take-out equivalent to about P1.9 billion.
“We note that our performance, in just two quarters, has already surpassed 2014’s full-year take-out value of P1.8 billion,” the company said.
“I have often said that the challenge has never been to create a long-term market for primary housing. It is already there. It is huge and it is growing at a rate faster than the supply of affordable housing in this country. The challenge lies in how genuine our understanding of this market is—how their aspirations, values and realities determine their behavioral, psychological and spending patterns,” Atencio said.