Pag-IBIG FundCorporate Headquarters

Petron Mega Plaza358 Sen. Gil Puyat Avenue

Makati City

Circular No. 414

TO: ALL CONCERNED

SUBJECT: AMENDED GUIDELINES ON TH~ Pag-IBIG FUND HOUSING LOANRESTRUCTURING PROGRAM

Pursuant to the approval of the Senior Management Committee, the AmendedGuidelines on the Pag-IBIG Fund Housing Loan Restructuring Program is herebyissued:

1. OBJECTIVES

The Pag-IBIG Fund Housing Loan Restructuring Program aims:

1.1. To assist delinquent borrowers / installment buyers to preserve their propertiesfrom foreclosure or cancellation of Contract-to-Sell / Deed of Conditional Sale(CTS/DCS) by providing them the opportunity to update or restructure theiraccounts under affordable terms and conditions; and

1.2. To update or fully pay delinquent housing loan accounts.

2. COVERAGE

2.1. Pag-IBIG housing loan borrowers, whose accounts are at least three (3) monthsin arrears, may apply for the Pag-IBIG Fund Housing Loan RestructuringProgram. However, borrowers with the following housing accounts shall beexcluded from availing of this program:

2.1.1. Sales Contract Receivable (SCR) accounts with cancelled CTS/DCS bynotarial act;

2.1.2. Foreclosed Mortgage Contract Receivable (MCR) accounts, where thewinning bidder is a third party;

2.1.3. Foreclosed MCR accounts, where Pag-IBIG Fund is the winning bidderbut the Certificate of Sale is already registered; and

Delinquent housing loan accounts under the Non-Performing AssetResolution Program (NPARP) may likewise avail of this program.

2.2. A delinquent beneficiary of the Group Land Acquisition and Development (GLAD)Program, whose accounts are at least three (3) months in arrears, shall beallowed to avail of this program; provided, said beneficiary shall fully pay his/hershare in the GLAD account or convert the same to individual housing loan underthe prevailing End-User Home Financing (EUF) Program.

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3. PROCESSING OF APPLICATIONS

3.1. Only applications with complete requirements shall be processed.

3.2. A processing fee of one thousand pesos (P1,000.00) shall be charged for everyapplication for the loan restructuring program under this Guidelines.

3.3. All applications shall be evaluated based on the borrower's capacity to pay.

3.3.1. The borrower has the capacity to pay the restructured loan, wherein themonthly amortization of the restructured loan shall not exceed fortypercent (40%) of the family's net disposable income (NDI).

The family's NDI shall be the gross monthly family income less statutorydeductions and monthly amortizations on outstanding obligations. For thispurpose, the monthly income of family members up to the second civildegree of consanguinity and first civil degree of affinity shall beconsidered.

Family members whose incomes are considered in the computation of thefamily's NDI will be considered as co-borrowers and shall be jointly andseverally liable for the loan. They shall be required to sign the necessarydocuments relative to the loan application. Their combined capacity to paymust be within the required NOI at any given time during the term of theloan.

3.3.2. For multiple housing accounts, the aggregate value, representingthe outstanding balances of the existing housing account/s uponapplication and the restructured housing loan, must not exceedP6,OOO,OOO.In case he/she is also a co-borrower/co-buyer, his/herproportionate share in the outstanding balance of the existinghousing account under a tacked account shall be included in thecomputation of the said aggregate value.

3.3.3. For a legal heir, the eligibility requirements pertaining to the borrower'scapacity to pay the restructured loan shall be waived.

3.4. If the borrower / legal heir is an inactive member of Pag-IBIG Fund, he/sheshall be required to reactivate his/her membership prior to the approval ofthe loan restructuring application. If the legal heir is not a Pag-IBIG member,he/she shall be required to register with the Fund.

3.5. The borrower shall be required to update the Real Property Tax (RPT) paymentand pay the one (1) year insurance premiums. If the said borrower cannot updatesaid tax payments, the Fund may advance the RPT payment and its amountshall form part of the interest-bearing principal; provided, he/she is able topresent an updated computation of the tax due.

3.6. For SCR accounts documented under CTS, the account shall be convertedto Real Estate Mortgage (REM) upon approval of the application for loanrestructuring. All expenses that will be incurred in the conversion, registration ofthe mortgage and/or transfer of title shall be for the account of the borrower,which shall be paid upon approval of application for this program.

However, in case the borrower previously paid retention fees for conversion, thesame shall be used by the Fund to convert the account into REM. Should theretention fees be insufficient to cover the conversion expenses, the difference

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between said conversion expenses and retention fees paid shall be shoulderedby the borrower.

3.7. For GLAD accounts, the following requirements shall likewise be satisfied:

3.7.1. The community/homeowners association is active and duly recognized bythe Securities and Exchange Commission, the Housing and Land UseRegulatory Board or the Cooperative Development Authority;

3.7.2. The Transfer Certificate of Title (TCT) of the GLAD housing project hasbeen unitized;

3.7.3. The corresponding individual ledgers of the beneficiaries are available,and their individual loan balances can be established; and

3.7.4. The community/homeowners association shall submit a NotarizedSecretary's Certificate, which provides:

a. That the outstanding loan obligation of the community/homeownersassociation shall be converted into individual housing loans;

b. That the community/homeowners association is authorized to executea Third Party Mortgage in favor of Pag-IBIG Fund for every loan of theindividual member that will be taken-out under the prevailing EUFProgram. The loan-to-appraised value ratio shall be one hundredpercent (100%).

However, a direct REM may also be executed between the beneficiaryand Pag-IBIG Fund upon the issuance of the Deed of Absolute Sale(DOAS) by the community/homeowners association in case thebeneficiary is financially capable to undertake the conversion toindividual housing loan and the transfer of TCT in his/her name; and

c. That Pag-IBIG Fund is authorized through a Special Power of Attorneyto execute the DOAS in behalf of the community/homeownersassociation in favor of the beneficiary upon full payment of his/her loanobligation with the Fund.

3.S. A borrower may avail of this loan restructuring program only once.

4. DOWNPAYMENT

A one-time downpayment equivalent to at least five percent (5%) of the totalarrearages, inclusive of the unpaid amortization and penalties, shall be requiredfrom the housing loan borrowers who will avail of this program.

5. TERMS AND CONDITIONS

5.1. RESTRUCTURED LOAN AMOUNT

5.1.1. The restructured loan amount shall be determined as of the date ofapproval of application for the loan restructuring program, which shallinclude the following:

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a. Interest Bearing

a.1 Principal (inclusive of outstanding principal balance and principalarrearages) ;

a.2 Insurance premium advanced by the Fund, if any;a.3 Real Property Taxes advanced by the Fund, if applicable;aA Unpaid Housing Fund Contributions (HFC) / Housing

Contributory Fund (HCF) / Mortgage Origination Fee (MOF) /Loan Administration Fee (LAF) / Mortgage Administration Fee(MAF) / Sales Administration Fee (SAF), if applicable.

b. Non-Interest Bearing

b.1 Unpaid Interest;b.2 Penalties;b.3 Foreclosure Expenses, if any, and other expenses.

5.1.2. For a delinquent account which is in the process of foreclosure but theCertificate of Sale is not yet registered, the following foreclosure expensesshall be included in the restructured loan amount:

a. Filing Fee - computation shall be based on outstanding loan obligationin accordance with the Schedule of Fees issued by the Office of theClerk of Court;

b. Cost of publication of the extrajudicial foreclosure of mortgage;

c. Sheriff's fee;

d. Notarial fee; and

e. Attorney's fees - for branches with retainers handling accounts forforeclosu re.

The Fund shall not collect attorney's fees for foreclosure actions whichare handled by internal lawyers of the Fund.

The borrower may either fully pay all the costs and expenses incurred bythe borrower relative to the preparation for foreclosure, sale, and custodyof the properties, or pay these expenses over a fixed period.

5.1.3. The cut-off date for the computation of outstanding loan obligation shallbe the date of approval of application for loan restructuring.

5.2. INTEREST RATE

5.2.1. The restructured loan amount shall be charged with interest basedon the Full Risk-Based Pricing (FRBP) Framework for restructuredloan accounts.

5.2.2. The interest rate shall be repriced based on the chosen repricingperiod of the borrower, reckoned from the date of approval of theapplication for loan restructuring program.

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5.3. LOAN TERM

The restructured loan shall be payable up to thirty (30) years but not toexceed the difference between age seventy (70) and the principalborrower's or the youngest co-borrower's present age; provided, further thatat any time within the term of the loan, the monthly amortization shall not exceed40% of the family's NOI.

5.4. SECURITY

The restructured loan shall be secured by the same collateral that secured theoriginal loan.

5.5. LOAN PAYMENT

5.5.1. Mode of Payment

a. The restructured loan shall be paid in equal monthly amortization insuch amount as may fully cover the principal and interest as well asinsurance premiums and other loan obligations over the term of theloan, and shall be made, whenever feasible, through salarydeduction. The borrower must however give his/her consent inwriting for the deduction of the amount of loan amortization fromhis/her salary.

b. The monthly amortization may also be paid to Pag-IBIG Fundthrough any of the following modes:

b.1 Post-dated checks;

b.2 Accredited Collection Partners;

b.3 Auto debit arrangement with banks; or

b.4 Any other collection system which the Fund may implement inthe future.

c. In case of salary deduction, an equivalent of one (1) monthamortization based on the restructured loan shall be paid by theborrower in advance directly to the Fund upon approval of loanrestructuring application. Said amount shall form part of theborrower's payment.

5.5.2. Payment Due Dates

a. The payment of monthly amortization shall commence on the monthimmediately following the approval of the loan restructuringapplication, and every month thereafter until full settlement of the loanobligation.

b. Should the due date fall on a non-working day in the Pag-IBIG Fundbranch where the housing account is maintained, the monthlyamortization shall be paid until the next working day.

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c. Partial payments shall be accepted but the unpaid portion of theamount due shall be charged with the applicable penalty. Any amountpaid by the borrower shall be applied in accordance with the order ofpriority under Section 5.5.4.

5.5.3. Penalty

Any portion of the amount due that remains unpaid after the due date shallbe charged with a penalty of one-twentieth of one percent (1/20 of 1%) forevery day of delay.

5.5.4. Any amount paid by the borrower shall be applied in accordance with thefollowing order of priority:

a. Penalty (if applicable)b. Mortgage/Sales Redemption (MRI/SRI) Premiums / Fire and Other

Allied Perils Insurance (FAPI) Premiumsc. HFC/HCF/MOF/LAF/MAF/SAF, if applicabled. Intereste. Non-Interest Bearing Principalf. Interest Bearing Principal.

5.6. PREPAYMENT

5.6.1. A borrower shall be allowed to prepay his/her housing loan in full or in partwithout prepayment penalty, pursuant to Republic Act 7394, otherwiseknown as 'The Consumer Act of the Philippines", but subject however toa service fee as may be fixed by the Fund.

5.6.2. Accelerated payments - Any amount in excess of the monthlyamortization due shall be treated as advance amortization and shall beapplied on the next amortization due date. However, upon request of theborrower and provided the amount to be applied is equivalent to at leastone monthly amortization, said amount shall be applied to the non-interest bearing principal. If the non-interest bearing principal is alreadyfully paid, excess payments shall be applied to the interest bearingprincipal.

The preference of borrower on the treatment of his/her excess paymentmust be noted on/properly disclosed in the Pag-IBIG Fund Receipt.

5.7. DEFAULT

The borrower shall be considered in default when he/she, or any of his/herco-borrowers in case of a tacked loan:

5.7.1. Fails to pay three (3) monthly amortizations;

5.7.2. Fails to submit proof of payment of the RPT for the year; or

5.7.3. Violates or fails to perform any of the obligations in the contractsentered into with Pag-IBIG Fund.

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In case of multiple housing loans, any event of default on any of thehousing accounts shall constitute default on all of his/her other housingaccounts.

5.8. EFFECTS OF DEFAULT

5.8.1. At point of default, the outstanding obligation, which includes the principal,accrued interests, penalties, fees and other charges shall becomeimmediately due and demandable. Said amount shall likewise be subjectto the following:

a. The unpaid amount shall continue to be charged with a penaltyequivalent to 1/20 of 1% of the amount due for every day of delay.

b. It shall continue to bear interest at the stipulated rate from the time theobligation becomes due and demandable.

5.8.2. While the account remains to be due and demandable, the borrower shallnot be granted another housing account under any of the Pag-IBIGhousing programs.

5.8.3. In case of default, Pag-IBIG Fund shall cancel the CTS/DCS orforeclose the mortgage in accordance with the existing guidelineson the matter. The borrower may likewise assign the mortgaged propertyin favor of the Fund through Dacion en Pago in settlement of his/heroutstanding loan obligation.

5.9. INSURANCES

5.9.1. The borrowers shall be compulsorily covered by Mortgage RedemptionInsurance or Sales Redemption Insurance (MRI/SRI), whichever isapplicable. In the case of borrowers and co-borrowers, who aretacked into a single account, each of them shall be covered by theMRI/SRI to the extent of their obligation. The MRI/SRI premiums shallbe the aggregate of the premiums corresponding to the housing loanobligation of each borrower.

In the event of death or permanent / total disability of any of theborrowers, Pag-IBIG Fund shall apply the MRI/SRI proceeds to theentire outstanding housing loan obligation, and the excess, if any,shall be paid to the borrowers or his/her heirs.

5.9.2. The principal borrower shall obtain Fire and Other Allied PerilsInsurance (FAPI) on the subject property for an amount equivalentto the appraised value of the housing component of the residentialunit or the loan amount, whichever is lower.

5.9.3. The borrower shall be required to pay the first year's premiums for theMRI/SRI and FAPI upon approval of the application for loan restructuring.

6. LOAN DOCUMENTATION

6.1. The principal borrower and the co-borrower/s, if any, shall execute a LoanRestructuring Agreement and new Promissory Note, wherein:

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6.1.1. The original loan and the restructured loan shall be consolidated.

6.1.2. Should there be co-borrower/s, they shall signify their conformity on theLoan Restructuring Agreement and new Promissory Note.

6.1.3. For MCR accounts, the Loan and Mortgage Agreement executed betweenthe Fund and the original borrower shall form an integral part of the LoanRestructuring Agreement.

6.1.4. For SeR accounts documented under DeS, the DeS executedbetween Pag-IBIG Fund and the borrower shall form an integral partof the Loan Restructuring Agreement.

6.2. For SCR accounts documented under CTS with an issued Notice ofCancellation (NOC), a Deed of Revocation on said notice shall be executed;provided that, the account is not yet cancelled.

Pag-IBIG Fund shall facilitate the transfer of title and tax declaration of saidaccounts in the name of the borrower and the registration of the Real EstateMortgage in favor of the Fund upon the approval of loan restructuring application.Any costs in excess of the retained amount for conversion shall be for theaccount of the borrower.

6.3. For GLAD accounts, if the beneficiary opts to convert his/her proportionate sharein the GLAD obligation to Pag-IBIG housing loan, the community/homeownersassociation shall execute an accommodation mortgage or Third-Party Mortgagecovering the property subject of the housing loan obligation in favor of Pag-IBIGFund.

6.3.1. In case the beneficiary is financially capable to immediately undertake theconversion to individual housing loan and to transfer the title in his/hername, a direct REM may be executed between the beneficiary andPag-IBIG Fund upon the issuance of the DOAS by thecommunity/homeowners association.

6.3.2. Upon full payment by the beneficiary of his/her corresponding share in theGLAD loan either through full payment or conversion to individual housingloan, Pag-IBIG Fund shall execute a Partial Release of Mortgage.

7. AMENDMENTS

The Senior Management Committee may amend, modify, or revise this Guidelines;provided, the amendments, modifications, and revisions thereof are in furtherance ofthe objectives of this program and consistent with the mandate of the Fund under itscharter and existing laws.

8. MECHANISM ON RESOLUTION OF ISSUES

Any issue in the interpretation and implementation of this Guidelines shall, asmuch as possible, be resolved by the concerned officer. Matters that are notthereby satisfactorily resolved shall be escalated to the next higher approvingauthority.

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9. REPEALING CLAUSE

Pag-IBIG Fund Circular Nos. 300, 305, 313, 320, and 325, and memoranda, rules,regulations, and other issuances that are inconsistent herewith are hereby repealed.

10. EFFECTIVITY

This Circular takes effect after fifteen (15) calendar days following thecompletion of its publication in the Official Gazette or in a newspaper of generalcirculation.

ACMAD R~ P. MOTIChief of Executive Officer

Makati City,

October 24, 2018

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