Definitions.
SEC. 23. Definitions. - As used in this Act, and unless the context otherwise requires, the term:
"Bond guaranty coverage" refers to the type of guaranty coverage which entitles the guaranteed entity to a claim payment in the form of debenture bonds upon call on the guaranty;
"Builder Developer" refers to the person or entity who develops raw land for housing;
"Cash guaranty coverage" refers to the type of guaranty Mcoverage which entitles the guaranteed entity to cash payment upon call on the guaranty;
"Developmental loan" pertains to a type of loan the proceeds of which shall be used for housing subdivision development or construction of residential houses;
"Guaranty premium" refers to the fee to be charged by the Corporation for the extension of the guaranty;
"Housing finance" refers to the comprehensive funds flow system covering the entire housing provision cycle from identification of financial requirements, fund sourcing for various aspects of housing program, such as lot acquisition, development and construction, to end-buyers financing;
"Maturity date" means the date on which the mortgage indebtedness would be extinguished if paid in accordance with the periodic payments provided for in the mortgage;
"Mortgage" shall mean a first mortgage on real state in fee simple, or on the interest of either the lessor or lessee thereof under a lease for not less than twenty (20) years to run from the date the mortgage was executed, upon which there is located or upon which there is to be constructed a building or buildings designed principally for residential use; and the term "first mortgage" means such classes of first liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate, together with the credit instrument or instruments, if any, secured thereby, and may be in the form of bonds, notes, stocks and mortgage and asset-backed securities, trust mortgages or mortgage indentures of deeds of trust securing notes, bonds, or other credit instruments;
"Mortgagee" shall mean the original lender under a mortgage, and its successors and assigns, and includes the holders of bonds, notes, stocks, mortgage and asset-backed securities, and other credit instruments issued under a trust mortgage or deed of trust pursuant to which such holders act by and through a trustee herein named;
"Mortgagor" shall mean the original borrower under a mortgage as defined herein, and its successors and assigns;
"Net worth" shall mean the paid-up capital plus fifty percent (50%) of the retained earnings of the Corporation.
"Open housing" refers to housing packages with cost above the medium-cost packages set in Section 15 of this Act but in no case costing more than Five million pesos (P5,000,000);
"Prudent production cost" of the project shall mean, with respect to the relevant project, the relevant cost of the builder of the proposed physical improvements, including buildings, utilities within the boundaries of the subject property, cost of land, architects' fees, taxes and interests accruing during construction, but not including builders' profit nor other charges, except for estimated depreciated cost of any existing utilities;
"Rental housing" shall mean housing, the occupancy of which is permitted by the owner thereof in consideration of the payment of agreed charges, whether or not by the terms of the agreement, such payment over a period of time will entitle the occupant to the ownership of the premises;
"Secondary mortgage market" means a market where existing mortgages are sold to and bought by the public;
"Single family residence" means a type of residential structure designed to include one dwelling; and
"Slum or blighted area" shall mean any area where dwellings predominate which, by reason of dilapidation, overcrowding, faulty arrangement or design, lack of ventilation, light or sanitation facilities, or any combination of these factors, are detrimental to safety, health, or morals.
Warranties of Developers / Builders, Sellers, or Funders.
SEC. 24. Warranties of Developers / Builders, Sellers, or Funders. - The Corporation shall require the guaranteed sellers, developers/builders, or funders, and such other persons as may be required by the said Corporation to become warrantor, to deliver to the purchaser or owner of such property a warranty that the dwelling is constructed in substantial conformity with the plans and specifications on which the Corporation based its valuation of the dwelling. The Corporation shall deliver to the developer/ builder, seller, or funder or other warrantor their written approval of any amendment of, or change or variation in, such plans and specifications which the Corporation deems to be a substantial amendment thereof, or change or variation therein, and shall file a copy of such written approval with such plans and specifications. Such warranty shall apply only with respect to such instances of substantial nonconformity to such approved plans and specifications as to which the purchaser or homeowner has given written notice to the warrantor within two (2) years from the date of conveyance of title to, or initial occupancy of the dwelling, which ever first occurs, without prejudice to all other rights and privileges which such purchaser or owner may have under any other law or instrument. Any amendment of, or change, or variation in, such plans and specifications shall be with the prior written approval of the Corporation.
Participation of Financing Institutions and Other Investors.
SEC. 25. Participation of Financing Institutions and Other Investors. - (a) All banking institutions, trust companies, personal finance companies, mortgage companies, building and loan associations, savings and loan associations, installment lending companies, insurance companies, the GSIS, the SSS, the Development Bank of the Philippines (DBP), and other government financing institutions or other government-owned and -controlled corporations, are hereby authorized to invest part of their funds for the purpose of giving loans and advances of credit contemplated and provided in this Act, as well as on the purchases of obligations representing loans and advances of credit made pursuant to the provisions of this Act, any provision of their respective charters or by-laws to the contrary notwithstanding. All housing loans, within the loan ceiling fixed by the Corporation to be granted by the foregoing government institutions shall be guaranteed by the Corporation under the provisions of this Act.
All mortgagee institutions participating in the mortgage guaranty program shall be bound by the terms and conditions of guaranteed mortgage loans as may be approved by the Corporation. Any amount invested by all the foregoing entities in the financing or mortgage loans for housing development under this Act, shall be guaranteed both as to principal and interest, as herein provided, by both the Corporation and the Government of the Republic of the Philippines.
(b) The aforementioned government financing institutions are hereby authorized to constitute the secondary market for guaranteed mortgages and shall:
Purchase, service or sell mortgages which are guaranteed under the provisions of this Act.
Subject to the approval of the Monetary Board of the Bangko Sentral ng Pilipinas, issue bonds, debentures, securities, collaterals and other obligations against the security of mortgages guaranteed under this Act, in such amount and in such proportion to the face value of such mortgage as their respective boards may designate and such obligations may be issued and offered for sale at such price or prices as the particular government institution may determine, and shall be negotiable and exempt from taxes both as to principal and interest, subject to Section 19 hereof.
Powers Over Homeowners' Associations.
SEC. 26. Powers Over Homeowners' Associations. - The powers, authorities and responsibilities vested in the Corporation with respect to homeowners' associations under Republic Act No. 580, as amended by Executive Order No. 535 is hereby transferred to the Housing and Land Use Regulatory Board (HLURB).
Subject to existing laws, the HLURB is hereby authorized to create additional positions and augment its present budget allocation as may be needed for the operation and maintenance of the newly-created unit or office as a consequence of the transfer of functions and powers.
Pending the approval of the HLURB's Revised Staffing and Organizational Plan and release of budgetary allocations therefor, the Corporation shall extend technical, operational and administrative assistance to the HLURB as may be mutually deemed necessary to ensure smooth turnover of functions. However, such assistance shall not extend beyond a period of one (1) year from date of effectivity of this Act.
Penalties.
SEC. 27. Penalties. - (a) Whoever, for the purpose of obtaining any loan or advance of credit from any person, partnership, association, or corporation with the intent that such loan or advance of credit shall be offered to or accepted by the Corporation for guaranty, or for the purpose of credit, or mortgage guaranteed by the said Corporation, or the acceptance, release, or substitution of any security on such loan, advance of credit, or for the purpose of influencing in any way the action of the said Corporation under this Act, (1) makes, passes, utters, or publishes, or causes to be made, passed, uttered, or published any statement, knowing the same to be false, or (2) alters, forges, or counterfeits, or causes or procures to be altered, forged, or counterfeited, any instrument, paper, or document, or (3) utters, publishes, or passes as true or causes to be uttered, published or passed as true, any instrument, paper or documents, knowing it to have been altered, forged or counterfeited, or (4) willfully overvalues any security, asset, or income, shall be punished by a fine of not less than the amount of the loan or loans involved or by imprisonment for not more than ten (10) years or both.
(b) Whoever (1) falsely makes, forges, or counterfeits any obligation or coupon, in imitation of or purporting to be an obligation or coupon issued under authority of this Act, or (2) passes, utters, or publishes, or attempts to pass, utter, or publish, any false, forged, or counterfeited obligation or coupon purporting to have been so issued knowing the same to be false, forged, or counterfeited, or (3) falsely alters any obligation or coupon so issued or purporting to have been so issued, or (4) passes, utters, or publishes, or attempts to pass, utter, or publish, as true, any falsely altered or spurious obligation or coupon, so issued or purporting to have been so issued, knowing the same to be falsely altered or spurious shall be punished by a fine of not less than the amount of loan involved, or by imprisonment for not more than five (5) years, or both.
(c) Any person (1) who willfully and knowingly makes, circulates, or transmits to another or others any statement, or rumor written, printed or by word of mouth, which is untrue in fact and is directly or by inference derogatory to the financial condition or affects the solvency or financial standing of the Corporation, or (2) who knowingly counsels, aids, procures, or induces another to start, transmit, or circulate any such statement of rumor, is guilty of felony punishable by a fine of not less than the amount of loan involved or by imprisonment of not exceeding one year, or both.
Fund Sources for Operation.
SEC. 28. Fund Sources for Operation. - The Bangko Sentral ng Pilipinas may extend to the Corporation advances which may be needed for its operations and/or grant loans secured by any assets which are defined as acceptable securities by the Monetary Board.
Exemptions.
SEC. 29. Exemptions. - The Corporation is exempt from the coverage of the regulations of Bangko Sentral ng Pilipinas governing quasi-banking functions.
Legal Counsel.
SEC. 30. Legal Counsel. - The Office of the Government Corporate Counsel shall be the General Counsel of the Corporation.
Resident Auditor.
SEC. 31. Resident Auditor. - The Resident Auditor of the Corporation shall be appointed by the Chairman of the Commission on Audit, who shall also appoint and for cause, remove, upon the recommendation of the Resident Auditor, the personnel of the Auditing Office. The Auditor shall submit, through the Commission, an annual report on the financial condition and the result of the operations of the Corporation to the President of the Republic of the Philippines, each member of the Senate and the House of Representatives, the National Economic and Development Authority and the Chairman of the Commission on Audit.
Reports.
SEC. 32. Reports. - The Corporation shall submit a quarterly report to the President of the Philippines and to each member of the Congress of the Philippines, within the first forty-five (45) days of the succeeding quarter, regarding its activities under this Act for the previous quarter.
Transitory Provision.
SEC. 33. Transitory Provision. - Any and all policies, guidelines, programs, ceilings and limits currently in effect with respect to the issuance of guaranty shall be submitted to the Monetary Board of the Bangko Sentral ng Pilipinas for concurrence within six (6) months after the effectivity of this Act.
Report on the Development of the Secondary Mortgage Market.
SEC. 34. Report on the Development of the Secondary Mortgage Market. - The Housing and Urban Development Coordinating Council and the Corporation shall submit to the President of the Philippines and to Congress a program for the development of the secondary mortgage market.
Sunset Review.
SEC. 35. Sunset Review. - Every year after the effectivity of this Act, Congress shall conduct a sunset review which shall entail a systematic evaluation of the Corporation to determine whether or not its performance, impact or accomplishment with respect to its mandates merit its continued existence. Such review shall be undertaken by the Committee on Housing and Urban Development and the Committee on Government Corporations and Public Enterprises of the Senate and the Committee on Housing and Urban Development and the Committee on Government Enterprises and Privatization of the House of Representatives which have legislative jurisdiction over the Corporation.
Suppletory Application of the Corporation Code.
SEC. 36. Suppletory Application of the Corporation Code. - The provisions of the Corporation Code shall have suppletory application in matters not provided in this Act.
Implementing Rules and Regulations.
SEC. 37. Implementing Rules and Regulations. - The Corporation, with the Department of Finance, the Housing and Urban Development Coordinating Council, and the Department of Budget and Management shall promulgate the rules and regulations necessary for the implementation of and consistent with this Act.
Repeal.
SEC. 38. Repeal. - Republic Act Nos. 580,1557 and 5488, and Executive Order No. 535 are hereby repealed. The provisions of Republic Act Nos. 6846, 7279 and 7835, and Executive Order No. 90 and all other laws, orders and proclamations, rules and regulations, or parts thereof, inconsistent with or contrary to the provisions of this Act or its purposes are hereby amended or modified accordingly.
Separability Provisions.
SEC. 39. Separability Provisions. - If for any reason, any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remaining provisions not affected thereby shall continue to be in full force and effect.
Effectivity.
SEC. 40. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in at least two (2) newspapers of general circulation.
Approved, March 7,2000.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
