Competitive interest rates on loans.
Lending Guidelines for Home Loan
- All qualified members of the association shall be eligible provided that:
- He is at least THREE (3) years in service as regular employee of Shell Companies in the Philippines or SESLA.
- He agrees to fulfill all loan requirements and execute all supporting papers and/or documents to the satisfaction of the REM.
- For married couples, both can apply for a single loan on the condition that both loans are in respect of the same PROPERTY which is the subject of the REM.
- All qualified members of the association shall be eligible provided that:
- New loans/second time loans may be granted. (Amended 1/19/09 thru BR#2009-01)
- No restructuring of loans will be granted under the present scheme/interest rate. Loans granted under the old scheme/interest rate can be restructured once with or without proceeds.
- The loan shall not cover incidental expenses, such as appraisal fees, documentation and documentary stamps, registration fees, etc. All these expenses shall be for the borrower’s personal account.
- The borrower shall not, without the written consent of the Association sell, encumber, or further mortgage the property used as collateral to secure his obligation under the REM.
- Loanable Amount and Other Limits
- The association may grant loans not exceeding the amount deposited and/or contributed by the member-borrower plus his twelve (12) months salary, or up to seventy percent (70%) of the fair market value of the property acceptable as collateral on first mortgage that he may put up by way of security: Provided that direct indebtedness to an NSSLA of any member-borrower for money borrowed with the exception of money borrowed against obligations of the BSP or of the Philippine Government, or borrowed with the full guarantee of the Philippine Government in the payment of principal and interest, shall not exceed fifteen percent of the unimpaired capital and surplus of SESLA.
- Maximum Loanable amount shall be equivalent to 70% of the appraised value of property/ies used as collateral.
- No loan shall be allowed in excess of any amount for which the corresponding monthly amortization (principal plus interest), when added to other deductions from the borrower’s pay, will produce deductions totaling more than 60% of the borrower’s pay (basic monthly salary). However, in cases where the recurring deductions exceed 60%, additional sources of income and other covenants shall be required to satisfy the loan subject to appropriate credit approval.
Terms of Payment
- Loans are payable up to maximum of 10 years.
- Repayment of principal and interest on the loan will be made in equal monthly installments through payroll deduction.
- For non-payroll borrowers, principal and interest on the loan will be made in equal monthly installments through Post Dated Checks.
- The borrower may liquidate without penalty, at any time, his outstanding loan balance.
- Interest rate currently under review.
- Loans under REM will be charged a processing fee. (Appendix A)
Collateral and Mortgage Requirements
- The property to be offered as collateral will be the residential house and lot or condominium unit for which the housing assistance was secured on a first mortgage in favor of the Association.
- Appraisal report of collateral duly authorized by the association.
- By way of additional security for the repayment of a loan under the REM, the applicant/borrower will be required to assign in favor of the Association all rights to such benefits he might be entitled to by way of severance, death and other payments due him from the Association and SCiP.
- In the event of violation of any provision of REM Implementing Rules and Regulations and/or provisions of attendant contracts, the Association reserves the right to accelerate payment of all outstanding amortization and demand payment together with accrued interest.
- The property offered as collateral must be covered by insurance against fire with an insurance firm acceptable to the Association. Such insurance coverage shall be endorsed to the Association as its interest may appear. The amount of insurance must be sufficient to cover the loan amount and subsequently, the outstanding balance at the time of each renewal.
- The applicant shall furthermore secure a Mortgage Redemption Insurance (MRI) in such amount to cover his outstanding loan with the Association as principal beneficiary
Types of Loan
- To finance the outright purchase of a residential house and lot.
- To finance the construction of a new residential house on a lot owned by the member/borrower.
- For re-financing of an existing residential housing loan obligation with assumption of mortgage.
- To finance major repairs, remodeling, extension, and/or improvements on the residential house, provided that its residential character is not altered.
- To finance the purchase of lot and construction of a residential unit.
- Redemption of a foreclosed property.
- To finance the outright purchase of an existing / ready for occupancy (RFO) condominium unit.
Any qualified member who wishes to avail himself of a loan under REM shall submit the following:
Basic documents required to support the loan:
- For all types of loans, 1 copy of Loan Application Form.
- For all types of loans, 1 copy of Income Tax Return for the last four (4) years (necessary only for Retirees/Outside Payroll)
- For all types of loans, 1 photocopy of the owner’s Transfer Certificate of Title (TCT) including entries of encumbrance, if any.
- For all types of loans, 1 photocopy of the latest tax declaration covering the lot/improvements and Realty Tax Receipt for the current year.
- For loan type numbers 2, 3, 5 & 6, 1 copy of Statement of Account if lot is not fully paid for or for re-financing/foreclosed property.
- For loan type numbers 1, 2, 5 & 6, 1 copy of Deed of Absolute Sale and/or Contract of Sale for purchase of residential unit or unpaid lot.
- For all types of loans, 1 copy of Lot plan and vicinity map signed/sealed by registered engineer (scale 1:200).
- For loan type numbers 2, 3 & 5, 1 copy of building plans and general working drawings (signed/sealed by an Architect or Civil Engr.)
- For loan type numbers 2, 3 & 5, 1 copy of specification of materials and construction (signed/sealed by an Architect or Civil Engr.)
- For loan type numbers 2, 3 & 5, 1 copy of bills of materials and cost of labor (signed/sealed by an Architect or Civil Engr.)
- For loan type numbers 1, 4, 5 & 6, 1 copy of picture of existing house and all portions to be repaired/remodeled for major repairs.
- For loan type numbers 1, 2 & 3, 1 copy of certificate of house and lot acceptance.
- Final documents to be submitted:
- For all types of loans, 2 copies of Annotated Loan Agreement with Real Estate Mortgage. (To be prepared by SESLA).
- For all types of loans, 2 copies of original and photocopy of annotated Owner’s duplicate Transfer Certificate of Title.
- For all types of loans, 1 photocopy of Duplicate of Declaration of Real Property.
- Basic documents required to support the loan:
- Procedure in Processing of Loan under Real Estate Mortgage
- Basic Documents
- Appraisal Report of collateral or Zonal Valuation Report which is usually lower than the Fair Market Value and the Appraised Value of the property.
- Certified true copy of TCT
- Site ocular inspection
- Capacity to pay based on borrower’s pay slip, spouse income
- Loan Processing
- Approval of at least 4 directors.
- Preparation of Loan Agreement, Assignment of retirement pay and SPA to be signed by the borrower with marital consent, if applicable. For Loan Type number 2 (To finance the construction of a new residential house on a lot owned by the member/borrower), Agreement from member that in the event 70% of the appraised value of his property (after construction) would not be sufficient to cover the amount of loan released, he would immediately settle/return the difference.
- Registration of Loan Agreement and Annotation of TCT to be accomplished by the borrower. On the other hand, additional loan need not require annotation of TCT.
- Verify Signature of Register of Deeds – TCT vs. Annotation
- Preparation and Release of Check
- In cases where the original TCT or CCT is not yet available or payment is required to transfer the title to the borrower’s name, the check maybe released provided that any of the following documents is submitted:
- Letter of Undertaking
- Letter of Unit Turnover
- For Loan Type number 2, (To finance the construction of a new residential house on a lot owned by the member/borrower) releases shall be subject to ocular inspection by SESLA representative of the work completed as follows:
- Initial release- 70% of Appraised value of Lot (collateral)
- 2nd release – 35% upon 35% completion of the building
- 3rd release – 40% upon 75% completion of the building
- 4th release – 25% upon 100% completion of the building
- In case of default, the following procedures shall be undertaken:
- 1 month default – demand letter
- 2 months default – 2nd demand letter
- 3 months default – 3rd demand letter
- 4 months default – notice of extra judicial foreclosure
- In case of separation from the service either by resignation, discharge, death, or for any other cause, the full balance of the loan shall become immediately due and payable.
- Insurance proceeds with SESLA as the assigned primary beneficiary shall be applied to the outstanding balance of the loan, excess if any shall be paid to the designated beneficiary/ies else to the legal heirs;
- The borrower or his heirs should, therefore, pay the outstanding balance to the Association; otherwise, the property shall be subject to sale.