As of yesterday, the Northern Marianas Housing Corp. had received an additional six notices of demand on top of the 54 previously issued by the U.S. Department of Agriculture-Rural Development.
In an interview yesterday, NMHC credit and mortgage division manager Jesse Palacios confirmed to Variety, “We have received six more notices from RD.”
Variety asked Palacios about the contributing factors to the rising tide of borrowers defaulting on their loans. Palacios cited the economy, utilities, and borrowers dying before paying off the loan.
“Some of these loans are really old loans. Some borrowers have passed away and no one has come forward to pay because of probate issues among other issues,” Palacios said.
He added that some have already moved to the United States mainland.
In his division’s conversations with those who have come forward to discuss their finances, Palacios said a number of borrowers were conflicted with setting their priorities.
The borrowers, he said, were torn between putting food on the table, prioritizing utilities and paying off their home loans.
However he expressed concern that some borrowers do not respond to the notices when they receive them until it’s too late.
He told Variety that federal loans are strict when it comes to delinquency.
When the borrowers reluctantly come forward to respond to notices, then the NMHC will be put in a situation where its guaranty will have to be tapped.
As for the home loans that the housing agency guaranteed with Bank of Hawaii, Palacios said when payments are 90 days past due, the bank would call on the NMHC’s guaranty.
With Wells Fargo, the NMHC guaranty varies for every loan, ranging from 25 percent to 100 percent.
As for BankPacific loans, Palacios said it’s the top 25 percent of the loan.
Non-performing loans
There’s no abating to the rising number in delinquent borrowers for the loan programs administered by the Northern Marianas Housing Corp.
Based on the delinquency report as of Oct. 31, a total of $8.58 million loans of the total $21.25 million in loans — excluding interest — are now delinquent.
Under the NMHC local funds, Of the $3.18 million in total loan balance (principal only) for Saipan, there’s a total of $1,441,635.43 delinquent loans, 36 percent of the total 78 loans were over 90 days past due.
On Tinian, there’s $319,583.55 in delinquent loans from the total $487,908.53.
Of the 13 loans on Tinian, 54 percent are already over 90 days past due.
Three of the four loans on Rota totaling $29,238.31 of the $33,018.71 loans are over 90 days past due.
With regard to the HOME program, from the total $1,845,604.86 on Saipan, $918,438.56 is delinquent.
From the total 124 loans on Saipan, 8 are 60 days overdue and 58 are over 90 days past due.
Under this program on Tinian, $118,506.77 of $270,494.21 are delinquent with 6 of 13 total loans 90 days past due.
For Rota, 67 percent or 4 of the 6 loans are 90 days overdue. From the total $25,662.58 loans (principal only), $5,864.54 are delinquent.
Based on a Sept. 2011 report, under the USDA RD program with a total of $7,725,827.77 in loan exclusive of interest, $4,408,023.19 in loans, excluding interest, are non-performing.
Of the 291 loans under the RD program, 19 are 30 days past due, 14, 60 days past due, and 71 are 90 days past due.
For loans under Bank of Hawaii totaling $960,424.38, a total of $208,112.34 is already delinquent. Of 16 loans, 1 is 60 days past due and 2 are over 90 days past due.
According to an Oct. 2011 loan report for Wells Fargo, $302,276.16 of $1,680,443.92 is delinquent.
Of the 24 loans, 8 percent is 30 days past due and another 8 percent is 90 days past due.
Based on Sept. 2011 report, for the $3,474,560.34 loans under BankPacific, $833,286.32 is already delinquent.
Of the 54 total loans, 4 are 30 days delinquent; 4 loans, 60 days delinquent; 5 loans, 90 days past due.
The NMHC portfolio, based on an early Nov. 2011 financial report, was $21,978,456.38.
NMHC credit and mortgage division manager Jesse Palacios told Variety that the housing agency is still persistent in working with the borrowers, encouraging them to come forward and work with them.
