CDA acting Executive Director Oscar Camacho, in a letter to House Ways and Means Committee Chairman Ray N. Yumul, R-Saipan, said the agency oppose the passage of House Bill 16-114, which was offered by one of CDA’s delinquent borrowers — Rep. Victor B. Hocog, Ind.-Rota.
The bill wants to give relief to CDA borrowers facing deficiency judgments.
According to the bill, many individuals and small businesses borrowed money from CDA at a time when real property values in the CNMI were very high, but because the economy has faltered, it is now impossible for them to meet their loan payments and obligations.
But Camacho said CDA has already taken action to help the delinquent borrowers or those facing foreclosures.
“The CDA board adopted a debt relief program which is presently being implemented to assist delinquent and distress borrowers,” he said.
Camacho said they continue to look for programs that will be applicable to borrowers facing foreclosures.
“The legislation as proposed is not the answer to the problems of our delinquent borrowers,” he added.
CDA is extending assistance to delinquent borrowers on an individual basis and this can either be a lower interest rate for a specific loan, an extension of loan term payments, deferments and other options that may be applicable to the borrowers.
As of Dec. 31, 2007, about 63 percent of CDA’s direct loans were in delinquent status translating to about $15.76 million in loans that are in default.
The figure does not include other outstanding balances such as those involving the debt relief program, judgments, bankruptcies, buybacks and matured loans which, if factored into the equation, will boost the delinquency rate to 80 percent.
The agency had loaned out a total of $36.275 million by end of December last year. Of its 194 borrowers, 179 were delinquent.
As of November 2007, the CDA had 30 loans with outstanding balances and accrued interests totaling some $13 million that had been brought to court.
