41

IA I RUPINO

CORPORATE CIRCULAR NO. 072 23 May 2019 Series of 2019

NHMFC

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NATIONAL HOME MORTGAGE FINANCE CORPORATIQ

SUBJECT: IMPLEMENTING RULES AND REGULATIONS (IRR) ON THE EASE ON THE DISPOSAL/SALE OF ASSETS PROGRAM (EDSAP)

Pursuant to Board Resolution No. 3978 dated April 17,2019, the following implementing rules and regulations on the Ease on the Disposal/ Sale of Assets Program are hereby issued:

SECTION I. TITLE

This Program shall be known as the Ease on the Disposal/Sale of Assets Program (EDSAP).

SECTION II. OBJECTIVES

This Program aims to:

Expedite the disposition of the Non-Performing Assets (NPAs) through aggressive assets disposition program.

Dispose delinquent assets of the Corporation at the highest value possible.

Increase the cash inflow in order to channel more funds for take-out of new accounts under the HLRPP Program in support of the Securitization Program.

SECTION III. COVERAGE

This Program covers all delinquent accounts of the Corporation with more than forty-eight (48) months in arrears under the following:

Acquired Assets

Folio I

Special Projects

1 I Ease on-the-DI viLi_nvitinAaBabg8 trOWARATt151T., LEGASPI VILLAGE, MAKATI CITY TELEPHONE NUMBER 893-1501

Foreclosed CMP

Unified Home Lending Program (Folio II)

Housing Loan Receivables Purchase Program (HLRPP)

PEA Accounts

SECTION IV. DEFINITION OF TERMS

Non-Performing Assets (NPA) refers to accounts with arrearages of at least forty-eight (48) months and foreclosed accounts which have not been consolidated under the name of NHMFC.

Non-Performing Loans (NPL) refers to accounts with arrearages of at least forty-eight (48) months.

Occupant-assumer refers to the person who exercise actual possession over the subject property by virtue of a right vested by valid contract (such as, but not limited to, Deed of Sale, Transfer of Rights) or by law.

Buyer refers to any person, whether natural or juridical, other than the borrower on record, willing and able to purchase the subject property, in cash or installment basis.

Offer price refers to the price at which the buyer is willing to purchase the subject property.

Letter of Intent is the letter submitted by any interested party, signifying his/her intention to purchase the subject property, coupled with an offer price to the NHMFC.

Affidavit of Undertaking is the undertaking made under oath by the interested buyer, in relation to the intended purchase of property, which among other things relieves NHMFC from liability in the event of disapproval of the offer to purchase. Further, the buyer likewise undertakes not to transfer his/her rights to the subject property until fully paid without the consent of the NHMFC to any third party in the event that his/her application is approved.

Certificate of Sale (COS) refers to the award issued by the Sheriff or Notary Public to the highest bidder in an auction sale pursuant to Act No. 3135, as amended, otherwise known as the "Extra-Judicial Foreclosure Act".

2 I Ease on the Disposal/Sale of Assets Program (EDSAP)

9. Contract to Sell (CTS) of the property refers to the contract to be executed between NHMFC and the buyer whereby ownership over the property is reserved or remains with the NHMFC until full payment of the contract price is made by the buyer.

SECTION V. MECHANICS

A. ELIGIBLE BUYERS

Any qualified person, natural or juridical;

Key Shelter Agency (KSA) and government employees/Individual who are interested to buy up to a maximum of two (2) lots covered by individual titles;

Developers who are interested to buy properties per block covered by individual titles;

Developers who are interested to buy raw land or undeveloped projects covered by individual or mother titles;

A group of at least two individuals/developer;

B. SELLING PRICE

Lot - the prevailing market value/appraised value. House - shall be based on the original base cost.

Provided that the net selling price (selling price less applicable discount) will not be lower than the book value.

C. MODES OF PAYMENT

Cash Payment - full payment of the net selling price within 30 calendar days from receipt of the Notice of Approval of Sale. No interest shall be charged for cash payments.

Installment - payment of equal monthly amortization throughout the loan term.

3 I Ease on the Disposal/Sale of Assets Program (EDSAP)

D. DISCOUNT

1. Individual buyer

Cash - Thirty percent (30%)

Installment - Twenty-Five percent (25%)

2. Group or Developers:

Aggregate Amount Applicable Discount

More than 10M up to 50M 40%

More than 50M up to 100M 42%

More than 100M 45%

DOWNPAYMENT

No downpayment (DP) required, however the buyer may opt to pay any amount as DP which will be deducted from the net selling price.

INTEREST RATE

The interest rate to be charged to the net selling price shall be as follows:

Loan Amount Interest Rate Less than Php450,000.00

• 4.5% per annum for the first 10 years and 6.5% from the 11th year up to the end of its term

More than Php450,000.00

• 6.5% per annum for first 10 years and 8.5% from the 11th year up to the end of its term

G. TERM

Lot only - maximum of ten (10) years. House 86 Lot - maximum of thirty (30) years.

4 I Ease on the Disposal/Sale of Assets Program (EDSAP)

The buyer's age shall not exceed seventy (70) years old at the date of loan maturity.

H. PENALTY

Any portion of the amount due that remains unpaid after the due date shall be charged with a penalty of 1/15 of 1% for every day of delay.

I. NON-REFUNDABLE PROCESSING AND APPRAISAL FEES

Processing Fee - P 3,000.00

Appraisal Fee NCR - P 4,000.00 Outside NCR - P 4,000.00 up (depends on location)

J. INSURANCE

An insurance coverage shall be required for all house and lot accounts subject for evaluation and approval by the Insurance Provider.

K. APPLICATION OF PAYMENT

The installment payment shall be applied according to the following order of priority:

Penalty; Insurance; Interest; and Principal.

L. APPLICATION REQUIREMENTS

Two (2) valid government-issued IDs Billing Statement/ s in the name of the buyer Proof of Income (submit at least one) a. Locally Employed

Latest Income Tax Return (ITR) or BIR Form 2316 Latest one (1) month payslip

5 I Ease on the Disposal/Sale of Assets Program (EDSAP)

Certificate of Employment with Income (COEI)

b. Self-Employed Latest Audited Financial Statements with latest ITR Bank Statements or photocopy of passbook for the last three (3) months

c. Employed Abroad Proof of Remittance for the last three (3) months Latest Crew Contract, if sea based Employment Contract Latest one (1) month payslip

Duly signed Application Form for EDSAP Signed and notarized Promissory Note (PN) Signed and notarized Affidavit of Undertaking Signed and notarized Contract to Sell (CTS) Submission of current Real Property Tax (R1Y1), if applicable.

SECTION VI. CANCELLATION OF SALE

1. The sale of the asset shall be cancelled under the following circumstances:

a. The buyer withdraws his offer to purchase after it has been accepted.

b. If cash payment, the buyer fails to pay the full amount within 30 calendar days.

c. For installment sale, the buyer either:

Fails to pay three (3) monthly installments;

Fails to pay the real property and other applicable taxes.

d. The buyer violates or fails to perform any of the obligations in the contract entered into with NHMFC.

2. A Notice of Cancellation of Sale shall be issued to the buyer. Once the sale is cancelled, the buyer loses his right to re-purchase the property/ies.

3. If the buyer is already occupying the property, he shall be given 30 calendar days from receipt of the Notice of Cancellation of Sale to vacate the property.

6 I Ease on the Disposal/Sale of Assets Program (EDSAP)

SECTION VII. FORFEITURE OF PAYMENTS

Once the sale of the asset is cancelled as provided in the immediately preceding section, all payments made by the buyer shall be forfeited in favor of NHMFC.

SECTION VIII. GENERAL CONDITIONS

All expenses advanced by NHMFC shall be added to the book value of the account to include all expenses e.g. Real Property Tax (RPT). (Book value = Principal + Six (6) months accrued interest + Insurance + Other related expenses)

Payment of Capital Gains Tax (COT) and Documentary Stamps Tax (DST) and other fees imposed by the government agency to effect the transfer of ownership shall be for the account of the buyer.

The concerned Department shall prepare the Contract to Sell (CTS) to be signed by the Manager of the department concerned.

Disposal of the Corporation's assets shall be on "As Is, Where Is" basis, which means that the buyer accepts the physical condition of the subject property including whether it is occupied or not.

SECTION IX. OTHER PROVISIONS

It is incumbent upon the buyers to make the necessary investigation, inspection and verification of property/ ies for sale before making an offer. Buyers must likewise make the necessary confirmation before purchasing the property.

In the event that a representative act on behalf of an offeror, the former must submit together with the required forms, a Special Power of Attorney (SPA) to represent an individual person or Secretary's Certificate for juridical entities.

The Corporation reserves the right to reject any and all bids/offer, to waive any formality therein, to accept such bids/offers as may be considered most advantageous to the Corporation.

The Management may effect changes, revisions, or amendments to this set of Guidelines as it deems fit necessary or issue such clarificatory orders or memoranda with respect to the administrative or procedural matters concerning the program.

7 I Ease on the Disposal/Sale of Assets Program (EDSAP)

SECTION X. MECHANISM ON RESOLUTION OF ISSUES

Any issue in the interpretation and implementation of this Guidelines shall, as much as possible, be resolved by the concerned officer. Matters that are not thereby satisfactorily resolved shall be escalated to the next higher approving authorities.

SECTION XI. EFFECTIVITY

This Circular shall take effect immediately upon publication in the Corporation's official website.

DC FELLXBERTO U. BUSTOS . et Presic4nt TI

8 I Ease on the Disposal/Sale of Assets Program (ED SAP)

Date

NATIONAL HOME MORTGAGE FINANCE CORPORATION Filomena Bldg III, 104 Amorsolo St., Legaspi Villate, Makati

SUBJECT: LETTER OF INTENT

Dear Sid Madam:

This is to formally express my/ our intent/offer to purchase a property located at

I/ We am/are therefore tendering, together with this letter and by way of payment for a non-refundable processing and appraisal fees, in the amount of , (PhP ) for the availment of the EDSAP Program.

I/ We am/ are fully aware of the one (1) year redemption period of the Original Borrower, his successors and assignees commencing from the registration of the Certificate of Sale (COS) for unregistered COS. In the event that the Original Borrower, his successors and assignees exercise his right of redemption over the subject property, I/ we undertake to respect such right and cede my/ our rights upon reimbursement by the Original Borrower, his successors and assignees of all the necessary, useful, legal and justifiable expenses that were incurred.

I/ we fully understand that I/ we cannot assign and/ or transfer said mortgage rights to any third party unless I/ we have fully paid our obligation to NHMFC.

Likewise, we understand that NHMFC reserves the right to reject any offer to purchase, to waive any formalities thereon, or to accept such application/ offer to purchase as may be deemed advantageous to NHMFC.

In this regard, attached with this letter is my sworn undertaking to hold NHMFC free and harmless from any and/ all liabilities in the event that the latter rejects my offer.

Thank you.

Very truly yours,

(Signature over Printed Name)

(Signature over Printed Name)

Present Mailing Address:

Phone No. Mobile No.

FOR ASSET MANAGEMENT DEPARTMENT USE: ACCOUNT NO.: BORROWER'S NAME:

*Confidentiality Notice

NHMFC will not disclose any information gathered except as otherwise provided herein, subject to the provisions of the Data Privacy Act.

NAME MAILING ADDRESS

PROPERTY ADDRESS

COMPANY'S NAME

CIVIL STATUS

TEL. NO.

TEL. NO. TEL. NO.

COMPANY'S ADDRESS

NHMFC-AAD-F07-REV.

NATIONAL HOME MORTGAGE FINANCE CORPORATION .4t. Filomena Bldg., #104 Amorsolo Street Legaspi Village, Makati City

DATE FILED:

APPLICATION FOR EASE ON THE DISPOSAL/SALE OF ASSETS PROGRAM (EDSAP )

BUYER'S DATA

HOUSING LOAN ACCOUNT NO.:

Application Requirements: 1.) Two (2) valid IDs 2.) Billing Statement/s 3.) Proof of Income

COMPUTATION OF SELLING PRICE FOR INDIVIDUAL.

As of Application Date: LOT APPRAISED

VALUE HOUSE VALUE

OTHER RELATED EXPENSES TOTAL

=P= Less: Applicable Discount: LI Cash: 30% . Installment: 25%

Downpayment (Optional) NET SELLING PRICE

COMPUTATION OF OF SELLING PRICE FOR GROUP/DEVELOPER:

As of Application Date: LOT APPRAISED

VALUE HOUSE VALUE

OTHER RELATED EXPENSES TOTAL

=P= =P= Less: Applicable Discount: Q>10M to 50M: 40% fl>5oM to 100M: 42% >100M: 45% Downpayment (Optional) NET SELLING PRICE =P=

PAYMENTS

MORTGAGE BANK RECEIPT/S OFFICIAL RECEIPT/S DATE NUMBER AMOUNT DATE NUMBER AMOUNT

TOTAL =P= TOTAL =P=

LOAN VALUE RATE/TERM MONTHLY MRI FIRE TOTAL EFFECTIVITY DATE AMORTIZATION

=P=

BUYER'S SIGNATURE (Over Printed Name)

Assisted By: Checked By: Certified Correct By: Approved By:

COD/OIC Manager/OIC

*Confidentiality Notice

NHMFC will not disclose any information gathered except as otherwise provided herein, subject to the provisions of the Data Privacy Act

t‘ NATIONAL HOME MORTGAGE FINA/VCE CORPORATIO b.A. Fllomena Bldg, #104 Amorsolo Street, Legaspi Village. Makati City

EDSAP PROGRAM

PROMISSORY NOTE

//lVe promise to pay. jointly and severally, in Philippine Currency, the following obligation incurred on my/our mortgage loan originated by subject to the herein specified interest rate and payable in equal monthly amortizations of =1,1=

RATE/ MONTHLY MONTHLY LOAN AMOUNT TERM P6/ MW/FIRE

=P= =P= ,p=

To commence on loan shall have been fully paid.

and every of the month thereafter, until the

Further, I/We unconditionally bind myself/ourselves under the Terms and Conditions of the EDSAP Program of NHMFC

CANCELLATION OF SALE

I. The sale of the asset shall be cancelled under the following circumstances:

The buyer withdraws his offer to purchase after it has been accepted If cash payment,

The buyer fails to pay the full amount within 30 calendar days.

2. For installment sale, the buyer either

Fails to pay three (3) monthly installments during the term of the loan; Fails to pay the real property and other applicable taxes. The buyer violates or fails to perform any of the obligations in the contract entered into with NHMFC

3. Once the sale is cancelled, the buyer loses his right to repurchase the propertynes.

4. If the buyer is already occupying the property, he shall be given 30 calendar days from receipt of the Notice of Cancellation of Sale to vacate the property

BUYER'S SIGNATURE

SUBSCIBED AND SWORN To before me this at , affiant/s exhibiting to me his/ their Competent Proof/s of identity as above indicated.

Doc. No. Page No. Book No Series of

Republic of the Philippines) City of Makati gs•

AFFIDAVIT OF UNDERTAKING

I / We, (1) and (2) of legal age, Filipino and with residence at after having been sworn to in accordance with law hereby depose and state: THAT —

1. I/ We have submitted a letter of intent to NIIMFC regarding our intention to purchase a Property located at

on an "as is where is" basis.

I/we have tendered to NHMFC the amount of PhP ) as payment for the appraisal fee and the amount of (PhP as processing fee for my/our application to purchase the abovementioned property is non-refundable;

I/We hereby undertake to submit all the required documents necessary for the processing of the intended purchase of the abovementioned property and I/we hereby recognize and acknowledge the right of NHMFC not to process my/our application for purchase of the abovementioned property until such time that all of the documentary requirements have been submitted, and notwithstanding the tender of payments as specified above;

In relation with the submission of required documents, I/we hereby recognize and acknowledge the right of NHMFC to reject my/our application in the event that my/our capacity to pay for the abovementioned property has not been/could not be established;

In the event that NHMFC rejects my/ our offer to purchase, I/ we undertake to pay the difference between my/our offer and the selling price of the property and in the event of my/our inability to do so, I/we shall inform NHMFC in writing of my inability to pay the difference between my offered price and the Approved selling price within thirty (30) working days from receipt of the notice of rejection of my offer price;

On the other hand, if NHMFC accepts my/our offer to purchase and I/ we subsequently withdraw my/ our offer for whatever reason after such acceptance, I/ we am/ are waiving my/ our right to recover in favor of NHMFC;

In the event that I/we elect to pay for the monthly amortizations for the abovementioned property I/we intend to purchase by way of salary deduction, I/we hereby undertake to submit, as an additional requirement, the written authorization from the company I/we am/are employed to deduct from my/our salary, the said amortization payments;

S. I/we undertake to commence payment of the monthly amortization within thirty calendar days from the date of signing of the Contract to Sell (CTS) and have the remaining balance paid on or before their due dates;

9. I/we undertake to pay the required insurance policies as required by NIIMFC on the prescribed period in relation with my/our intent to purchase the abovementioned property;

U we fully understand that U we cannot assign and/ or transfer said mortgage rights to any third party unless U we have fully paid our obligation to NHMFC.

Uwe hereby recognize and acknowledge that NHMFC sells only whatever rights, interest and participation if may have over the abovementioned property and Uwe hereby undertake, at my/our expense, to assume the responsibility of taking the necessary legal action/s to evict any occupant/s of the property;

Uwe undertake to defray all expenses to be incurred in connection with the execution of the legal deeds and conveyance, including notarial fees and such other fees and expenses that may be necessary for the validity of the instrument and/or others that may be executed to implement the terms and conditions of the sale of the abovementioned property;

Uwe undertake to pay all taxes due (i.e. capital gains tax, documentary stamp tax, real estate tax, etc.) and all other charges and assessment that the Goverrunent of the Philippines may impose in the course of the foreclosure process and in effecting the transfer of ownership from NHMFC to me/us, and should any of these payments be advanced by the Corporation, Uwe undertake to pay the same at least one week prior to the signing of the CTS;

Uwe undertake to pay my/our monthly amortizations in full and on time, and in the event that Uwe ant/are unable to pay three months' worth of monthly amortizations, Uwe recognize and acknowledge the right of NHMFC to have me/us declared as in default, thereby making the entire loan obligation due and demandable even without notice, with my/our failure to settle my/our obligation constituting as a valid reason to cancel the CTS and to have all payments made treated as rental and forfeited in favor of NHMFC;

Uwe hereby undertake to perform, recognize and/or acknowledge all of the duties and obligations along with its corresponding necescary consequences in case of non-performance or violation, which may be imposed upon me/us by virtue of this affidavit, as well as all other documentary requirements Uwe am/are duty-bound to sign and submit in relation with my/our application for purchase of the abovementioned property;

I/ we are executing this Affidavit of Undertaking for all legal intents and purposes, attesting that each and every item as stated herein has been fully explained to, and has been understood by me, enabling me to apply for the purchase of the abovementioned property fully aware of the procedures, consequences and legal effects of all my actions in relation with said application.

(1)

(2) Affiant Affiant

Proof of Identity Proof of Identity Issued at Issued at Issued on Issued on

SUBSCIBED AND SWORN To before me this at , affiant/s exhibiting to me his/ their Competent Proogs of identity as

above indicated.

Doc. No. • Page No. Book No • Series of .