This move, according to the MPLT board of trustees, will allow the delinquent borrowers to comply with their obligations, especially those who have accounts that have been reduced to judgment and subject to an order of judicial sale within six months.
These borrowers have until May 31 to work on a rehabilitation plan.
“After that date all borrowers shall be deemed to be unwilling or unable to negotiate rehabilitation terms and MPLT shall proceed forward with foreclosure proceedings,” the MPLT board said.
There were 144 loans transferred from the Northern Marianas Housing Corp. to MPLT for first time homeowners and low-income residents who benefited from the home loan program.
The board said all borrowers, delinquent in compliance, have their accrued interest waived and removed.
However, the board added, this will also require the borrowers to sign a revised agreement which reflects the adjusted amount, interest rate, and modified payment plan acceptable to MPLT.
The interest rate for borrowers is no more than 1 percent every year.
MPLT believes that the rehabilitation plan and the revision of the loan agreements will protect its original investment and provide relief to borrowers amid the economic crisis.
When MPLT took over the administration of the loans, the investment it retained from NMHC amounted to $9,053,776.85 as of Feb. 1, 2008.
The board said it received letters from numerous borrowers seeking debt relief, and have received communications from the Legislature, asking MPLT to consider all proper measures to afford debt relief and assistance to the borrowers.
“The MPLT trustees have observed the current mortgage crisis and the desperate conditions in the CNMI affecting its borrowers in the MPLT home loan portfolio flowing from the increased energy costs, fuel costs, decreasing income due to austerity measures and other factors affecting borrowers’ ability to pay,” the board said.
MPLT, the board added, realizes that the foreclosure of properties, the current economic situation and real estate price pose a great challenge to the agency.
It noted that “the loss of homes as well as homesteads will have a terrible social impact on our community.”
The board said it prefers to revise its existing agreements with borrowers because of fear that MPLT might not be able to recover the principal and accrued interest on any properties sold at auction.
One of its actions is to identify performing and non-performing/delinquent accounts.
Borrowers who have not made payments or who have failed to make the required amount of monthly payments for a period of 180 days as of Oct. 31, 2008, and whose accrued interest has reached over $30,000 will be placed in the non-performing/delinquent accounts.
The board said the loan administrator will implement aggressive but pro-active collection measures and make recommendation regarding accounts appropriate for rehabilitation.
