NMHC board notes ‘high’ delinquency rate of loan accounts

The board of directors of the Northern Marianas Housing Corp. is concerned of the high number of delinquent accounts for their various programs.

For their own programs alone such as the HOME Investment Partnership Program, Neighborhood Stabilization Program, and Direct Family Home Loans, 84 of the 228 active loans are 120 days past their due. These amount to $2.9 million.

Although the percentage of the delinquent accounts, which is now at 37 percent has been going down, the board is still concerned of the amount of money that the corporation has failed to collect.

“I know you’re doing your best job but the delinquency rate here is really a big concern for us because that’s where the money is,” board director Dave Demapan said.

“The magnitude of $2.9 million, that’s huge,” he added.

Director Ignacio Perez reminded NMHC’s mortgage and credit division headed by manager Chris Pangelinan to do more diligence in their collection.

However, Perez also noted that it is their mission to help low-income families to have homes. He said NMHC should remind the clients of their obligations even before they reach 30-, 60-, or 120-day past their due.

“Your collection should be strong,” Perez said.

Director Diego Songao also noted the amount of money and said that if foreclosure is the only option after all other processes have been followed, then NMHC should go ahead with the process.

Board members asked the management if they need help.

“We want to make sure that we can improve the system. Do you need help, something to turn this around? Do you need additional people or what’s causing this?” Demapan said. “We need to identify the problem so that we can go from there.”

Pangelinan, however, pointed out that a matrix of things affects their ability to collect such as the cooperation of those accounts holders. He said they are doing their best to reach out to the clients and also help them in ways such as restructuring their loans.

Some clients, he said, reached as much as two restructurings but are still not able to maintain payments.

Perez said they are okay with their staffing, “We’re right-sized to a point but we can only do so much.”

In an interview, corporate director Jesse Palacios also noted issues in their collections such as deceased borrowers and those who are inconsistent with their payment schedules and fees who are trying to “prolong the inevitable”

“They’re just trying to prevent us from sending it to collection and then go through the process,” Palacios said.

He added that they are making an effort to reach out to the delinquent borrowers.

“We are beefing up our collection efforts. We are making an effort to contact the borrowers especially the really delinquent ones to come in and talk to us let us know what’s going on, what’s the hardship you are facing,” Palacios said.

“For those who just ignore the letters, we go there and they say they’re going to come in and they don’t do it then we have no choice but to forward those accounts to our collection attorney,” he added.

Although Palacios said they try as much as possible to help families out, they also have to be sterner and more assertive when it comes to loan payments

“That was a finding also last year, when [the U.S. Department of Housing and Urban Development ] came to monitor us, that we were not really following our policies and procedures because we are too lenient, giving them too many chances but at the same time, the leniency is affecting our audit,” Palacios said.