Congressmen to investigate low-cost housing foreclosures

MANILA, Philippines - Congressmen will investigate the reported foreclosure of some 52,000 low-cost housing units purchased by the Balikatan Housing Finance, Inc. (Balikatan) from the National Home Mortgage Finance Corporation (NHMFC), the chairman of the House housing committee said Friday. In a statement, Oriental Mindoro Rep. Rodolfo G. Valencia, committee chairman, said he would schedule the hearing on House Resolution (HR) 604, filed by Speaker Prospero C. Nograles, next week. HR 604 directs the House housing and urban development committee to investigate the foreclosure of low-cost housing units situated in five housing projects in Davao City, which are now owned by Balikatan. "Those cash-strapped families aired their grievances over the extremely stringent terms imposed on them by Balikatan to repossess their homes, such as payment of the full amount of their arrearages within three months or reappraisal of their outstanding loans to as much as 300% of the original loan amount," Mr. Valencia said. Balikatan is a special purpose company jointly owned by the NHMFC and the Deutsche Bank Global Opportunities. According to the Asian Development Bank, which lent P1.6 billion in 2005 to set up Balikatan, the NHMFC sold its non-performing loans composed of 52,289 individual accounts of low and middle-income housing units values at P13.45B to Balikatan. — Elizabeth T. Marcelo, BusinessWorld