Loren seeks credit leeway for Filipinos losing their homes

Senator Loren Legardayesterday urged government and private lending institutions to help Filipino families stave off the foreclosure of their mortgaged properties, especially their homes, in the face of the global economic downturn.

While the real estate situation in the Philippines may not be similar to that of the United States, Loren cited the importance of both the private and public sectors helping Filipino families weather the financial storm.

In the US, the foreclosure of 2.5 million homes is seen for 2009 compared to the 400,000 lost during a "busy" foreclosure year, said Loren, citing figures of the March 9, 2009 issue of Time magazine (The economy: House of Cards).

"Our people need to be cut some slack, more so those who had shown a good track record of paying their mortgages and other debts but who may temporarily find it difficult to meet their obligations," said Loren.

"They can start by helping our countrymen keep the roofs over their heads by making available to them affordable refinancing schemes," said Loren.

She emphasized that lenders must distinguish between those who had been delinquents even before the economy took a turn for the worse and those who really have shown a desire to pay debts but who are temporarily unable to do so.

But first, Loren urged the government to come up with comparative statistics on how many Filipino families had either lost their homes or are in danger of losing them due to the prevailing economic difficulties.

Loren said that while the US real estate sector reeled from sub-prime loans that had gone sour, many Filipino families may be in put in danger of losing mortgaged properties because of the downturn.

"Any one of these circumstances may bring a Filipino family to its knees - a breadwinner getting laid off or a family member requiring costly emergency medical care," she said.

She said that the Philippines can learn from the US experience of foreclosed properties having few takers due to the tightness of loans, high interest rates and the general aversion of the population at present for big-ticket purchases.