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Fund mulls sale of its housing loan assets
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Posted on Sep 29 2008
The NMI Retirement Fund is looking at selling its housing loan assets in a bid to streamline its portfolio.
Juan T. Guerrero, chairman of the Fund board of trustees, said the pension agency will soon issue a request for proposals from government agencies and any other financial institutions that may be interested in buying the frozen Member Home Loan Mortgage Program.
BankPacific previously bought a portion of the home loan portfolio. The remainder is currently valued at about $6.4 million, with 118 borrowers. It will be offered not only to banks, but also to public agencies such as the Northern Marianas Housing Corp. and Marianas Public Land Trust.
According to Guerrero, the Retirement Fund historically has experienced a good return on the housing loans. However, the Fund is recently seeing some borrowers go delinquent, and it wants to take the proactive approach of selling the portfolio.
“Compared with other government-run housing loan programs, we have the best in terms of profitability. The loans are tied with the pension of the retirees and even active members, so we have recourse [if they miss on payments],” Guerrero said.
“But the home loan program is such as small part of our portfolio,” he added. “We’re selling it so we can streamline our investments.”
According to the Retirement Fund’s handbook, the home loan mortgage program was created to assist eligible Fund members acquire a principal home, improve an existing home, refinance mortgages, and purchase leasehold property in fee simple.
Those eligible for the housing loan include government retirees, civil service employees who have been contributing to the Fund for at least three years, and contractual employees must have had at least 15 years of government service and at least 5 years of contributing membership to the Fund.
The minimum loan amount is $15,000 and the maximum is $150,000, at an interest rate of 9.5 percent. The maximum loan term is 30 years.
