By Emmanuel T. Erediano
Variety News Staff

SEVEN senators are urging the Commonwealth Development Authority to provide “incentives” to delinquent loan borrowers.
About 400 CDA loan recipients are on the verge of losing their “earthly possessions,” and many of them — voters all — are seeking the help of senators, three of whom are seeking re-election this year: Paul A. Manglona, R-Rota, Luis P. Crisostimo, D-Saipan, and Henry H. San Nicolas, Covenant-Tinian.
Senate Floor Leader, Felix T. Mendiola said these delinquent borrowers used their land as collateral.
He fears that CDA will end up owning these lands.
Besides Mendiola, Covenant-Rota, Manglona and San Nicolas, other senators who signed the proposal sent to CDA Chairman Vincent M. Calvo were Senate President, Joseph M. Mendiola, Covenant-Tinian, Senate Vice President Pete P. Reyes, Ind.-Saipan, Sen. Maria “Frica” T. Pangelinan, D-Saipan; and Sen. Paterno S. Hocog, R-Rota.
Crisostimo did not sign the letter.
The letter to CDA states that providing “incentives” will encourage borrowers to further invest in the rehabilitation, improvement, expansion or extension of the business facilities, structures or property that is being held as collateral and financed by the CDA loan.
This can be done, they said, “by providing certain credit against the accrued interest for qualified improvement expenses, thus, maintaining or increasing the value of the financed business or the property held as collateral, serving the interest of both CDA and the client.”
At the same time, “this kind of incentive will make the financed business more competitive, giving the borrower better capability to pay.”
CDA has already reduced its interest rate from 9 to 2 percent; restructured loans, including interest, to 30-year repayment periods; and set aside all current accrued interest which will be separately amortized and paid at some future date.
But the senators say that while these measures “are very important in getting a borrower back on track, the client will continue to carry the burden of excessive accrued interest that is assessed at a 9 percent interest rate.”
They propose:
— Restructuring the loan balance, excluding capitalized interest, for 30 years at a 2 percent interest rate. This is to bring the clients to a “real fresh start on their original loan.”
— Adjust all accrued interest, current and capitalized, to the 2 percent level and allow for its payment amortized over the same period as the restructured loan or at some future date.