Joshua Sasamoto, corporate director of NMHC, told Speaker Arnold I. Palacios, R-Saipan, that USDA-RD wants the “bad loans” fixed.
“As guarantor, NMHC does not have sufficient liquid assets to meet its guaranty commitment of over $5 million in defaulted home loans under the current RD program,” Sasamoto said in a letter to the speaker. “Because of the depressed market condition, proceeds from the sales of these homes will be insufficient to pay RD under the current guaranty agreement.”
At least 35 percent of homeowners who borrowed under the USDA-RD 502 and 504 home lending programs are in default.
A significant number of them are facing foreclosure.
Sasamoto said unless NMHC receives additional funding from the central government to cover the loans in default, the USDA will not release new loans.
“NMHC has been informed by the USDA-RD that before it can provide new loan funds under a new MOU, USDA-RD wants assurances that NMHC can meet its present guaranty obligations and will be able to continue as a viable guarantor for future loans,” he said.
During the House session on Wednesday, lawmakers briefly discussed the case of hundreds of local families who stand to lose their homes unless they pay their mounting debts.
Vic Speaker Joseph P. Deleon Guerrero, R-Saipan, asked the speaker to create a committee that will work with NMHC.
Palacios agreed and named Deleon Guerrero as chairman of the House Ad Hoc Committee on Housing.
The members are Reps. Francisco S. Dela Cruz, Covenant-Saipan; Victor B. Hocog, Ind-Rota; Tina Sablan, Ind.-Saipan; and House Minority Leader Oscar M. Babauta, Covenant-Saipan.
NMHC previously told the Legislature it needs at least $10 million buy bad loans and save hundreds of delinquent homeowners from facing foreclosure.
