MPLT: 14 home loan accounts in ‘serious delinquency’ status

The Marianas Public Land Trust’s home loan portfolio has 14 accounts that are in serious delinquency status, which means they are behind in payments by 91 to 183 days.

Marvin Deleon Guerrero, the home loan administrator of Bank of Saipan, which has been contracted to handle MPLT’s loan portfolio, disclosed that these accounts would soon be issued notices of last recourse. Failure to come in to settle their obligations will result in the referral of the bad accounts to the legal department.

Records presented to the MPLT board show that the 14 seriously delinquent accounts have a principal balance totaling to $756,446, excluding unpaid late charges and accrued interests.

Of the 14 bad accounts, three accounts have passed 121 days while six accounts are aged 183 days. One account is behind by 152 days while four accounts are aged 91 days.

Accounts are in “good standing” if they are current in payments or within the 30-day delinquency period. Those labeled as “seriously delinquent” are accounts beyond the 91-day to 121-day schedule.

Also notable in Guerrero’s report is the increase in “current” accounts in the portfolio.

In October 2013, there were a total of 61 accounts that were deemed current, or 53 percent of the entire loan portfolio, which has 103 accounts. The 61 “current” accounts total $2.674 million.

In November 2013, “current” accounts slightly went up to 65, or 58 percent. This totaled $2.931 million. Come December, another jump in the number was noted when “current” accounts increased to 73, or 68 percent of the entire portfolio, with then 104 accounts. This totaled to $3.423 million.

A notable decline was noted in accounts that passed the 121 days schedule from October to December. “Seriously delinquent” accounts that aged 121 days totaled 24 in October. A significant decline was noted in November with total of 18 until December, when only 9 accounts aged 121 days were recorded.

According to Deleon Guerrero, home loan collections in calendar year 2013—from January to December 2013—totaled $502,892, of which $441,623 went to MPLT; $39,684 went to Bank of Saipan as its fee; $5,959 went to escrow; and $15,625 went to insurance.

In the past 12-month period, Deleon Guerrero noted that the highest collection from the home loan portfolio was in October with $98,259. November also showed a high collection of $52,371 while December totaled $46,948.

Board trustees believe that the spike in collections in these months were the result of the payouts received by government employees from their retirement contributions.

MPLT consultant Bruce MacMillan described the updates on delinquency accounts as “very impressive” citing the significant decline in the number of accounts in delinquency and the amounts owed by borrowers.

“That’s really a strong shift. If we keep this up, we’ll be able to reduce our allowance for bad debts even further and that’s very positive. We’re making a very significant progress in this quarter,” said MacMillan, alluding to records in October to November 2013.

MPLT took over the handling of the home loan portfolio from the Northern Marianas Housing Corp. since 2008 as part of a settlement agreement.