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2 banks said interested in Fund’s home loan program
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Posted on Feb 28 2012
Two local banks have expressed interest in acquiring the NMI Retirement Fund’s member home loan program for an undisclosed amount, according to Fund board chair Sixto K. Igisomar.
He refused, however, to identify these banks, saying that negotiations are ongoing and that they are still finalizing the transaction.
The board decided last month to sell the program to free the Fund from the burden of handling it. The Fund earlier disclosed that the program has been yielding low returns and has a high delinquency ratio, among other concerns.
On Friday, Igisomar told Saipan Tribune that the program’s delinquency rate is at 37 percent.
The member home loan program is among the Fund’s local investments. The agency has invested $5.5 million in this program, of which a significant amount has yet to be collected from borrowers.
Fund records show that the program has a total of 106 loans, of which 31 are considered bad loans or delinquent. Of these bad loans, only two are potentially recoverable while the rest are considered “dead accounts.” Bad loans were estimated at close to $800,000 as of December 2010.
Igisomar disclosed that the board has tried several times to save the program but it seems the best way to do it is outsource or sell the entire portfolio, probably to a bank.
“Historically, there are issues about the program and we’re trying to balance the cost associated with this program. Although there are great benefits to members, there were also some challenges and areas that the Fund believes require its attention,” he earlier told Saipan Tribune.
