NMHC thumbs down buying Fund’s home loan portfolio

Posted on Feb 24 2012
By Clarissa David

The Northern Marianas Housing Corp. is not interested in buying the NMI Retirement Fund’s member home loan program due to the corporation’s own loan portfolio.

Housing corporate director Joshua Sasamoto informed the board during its meeting yesterday that the Fund is currently looking for buyers for its member home loan program, one of its four local investments.

The Fund is selling the program to relieve it from the burden of managing a program that yields a low rate of investment return and has high delinquency ratio.

“I don’t know if we’re in any position to purchase that portfolio but it’s obviously in line with our business,” Sasamoto initially said.

Sasamoto said the loan program is composed of 105 loans, with the delinquency rate at “32 percent as far as number and 39 percent as far as dollar amounts.” He added that 12.4 percent of the program is “doubtful” and annual return is at 8.95 percent.

He said the RFP, which closes on March 12, allows for one-day inspection of the loan portfolio after signing a non-disclosure agreement.

Board chair Marcie Tomokane noted that Housing is not in a position to purchase any more loans “or add more problems to ourselves.”

“We’re still dealing with other guaranteed loans that we have in our books,” said Tomokane, referring to their U.S. Department of Agriculture Rural Development program.

Tomokane added that the Fund’s member home loan program delinquency rate “is very substantial.”

The board concurred with Tomokane and decided to pass on the Fund’s RFP.

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