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Globe Asiatique win against Pag-ibig : Funding Commitment Agreement
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Section 3.5          Conversion of CTS documents to REM – The DEVELOPER shall convert the CTS to Real

Estate Mortgage (REM) on the 18th month from the date of loan take out.

The DEVELOPER may opt to convert CTS accounts with buyback guaranty earlier than the 18th month.

Notwithstanding earlier conversion of CTS accounts to REM, the buyback guaranty shall remain in full force until the end of two-year seasoning period.

The REM shall be executed under the following conditions: The conversion of the CTS to REM shall be based on the prior written notice from the Pag-IBIG Fund indicating the list of CTS accounts in current status which are eligible for conversion to REM

The conversion of CTS to REM shall be done within a period of one hundred eighty (180) calendar days, reckoned from receipt of the Notice of Conversion, but in no case shall it go beyond the 24th month of the seasoning period.

At the end of the required one hundred eighty-day (180) conversion period, the DEVELOPER shall be deemed to have complied with the conversion requirement if said DEVELOPER is able to present proof of payment to the RD, BIR, and the City/ Municipal Assessor’s Office. However, the DEVELOPER must submit to Pag-IBIG Fund the new TCT/CCT and New Tax Declaration in the name of member-borrower within sixty (60) calendar days from presentation of such proofs.

The DEVELOPER warrants that it shall convert the CTS accounts to REM at all cost, and that non-payment of the equity and other obligations due the DEVELOPER from the member-buyer shall not be grounds for non-conversion of CTS accounts notwithstanding any agreement entered into between the DEVELOPER and the member-buyer.

All expenses for the conversions of the CTS to REM which include the payment of all taxes incidental to the execution of the Deed of Absolute Sale in favor of the borrower/vendee shall be for the account of the DEVELOPER. For this purpose, Pag-IBIG Fund shall deduct an amount corresponding to the following percentages of the total loan value from the out proceeds of the developers:

LOAN                                    UPTO                                    OVER                                     OVER                                     OVER

VALUE                                  P180, 000                                             P180, 000 TO                      P500, 000                                             P1M

                                                                                                500, 000                                                TO P1M                                                TO P2M

BIR                                         2.5%                                      3.5%                                      4.5%                                      5.0%

RD                                          1.5%                                      1.5%                                      1.5%                                      1.5%

LGU                                       1.0%                                      1.0%                                      1.0%                                      1.0%

                                                 ______                                               ______                                                _____                                   ______

  1.                                                 5.0%                                      6.0%                                      7.0%                                      7.5%

The said rates shall be based on the original loan takeout value regardless of the selling price or zonal valuation of the property.

Pag-IBIG Fund may, from time to time, review the rates mentioned above and take the necessary adjustments thereon when circumstances warrant, as when new laws, ordinances, rules, regulations, or circulars are paused/issued by the concerned government office/ agency that may affect existing rates.

Retention for BIR or LGU expenses, in accordance with the above stated rates may be waived/ refunded prior to the conversion period only upon presentation of the original supporting documents, such as, but not limited to the following:

Certificates/ documents issued by a regulatory / government agency expressly granting exemption from taxes [i.e., creditable withholding tax (BIR) and transfer tax (LGU)that are directly related to the conversion of CTS accounts to REM; or

DST Declaration/ Return (BIR Form No. 2000), and

Payment Form (BIR Form No. 0605)

If the DEVELOPER is granted with tax incentives by the Board of Investments, it must still present a Certificate of Tax Exemption from the BIR.

A copy of each document certified by the issuing agency shall be kept by Pag-IBIG Fund

Pag-IBIG Fund shall release the retained amount to the DEVELOPER in any of the following cases: a) issuance of the notice for the DEVELOPER to convert the CTS to REM; or b) buyback of an account in default.

Pag-IBIG Fund shall release to the DEVELOPER or his duly authorized representative the retained amount of the loan documents upon: a) presentation of the updated real estate tax receipts; b) execution of a Deed of Undertaking pertaining to the conversion of the CTS account to REM; and c) execution of a Trust Receipt pertaining to the release of the owner’s duplicate of the certificate of title.

The documents to be released to the DEVELOPER shall include the following: a) Deed of Absolute Sale executed by the DEVELOPER in favor of the member-borrower; b) Original Transfer/ Condominium Certificate of Title (TCT/CCT); c) Tax Declaration; and d) Loan and Mortgage Agreement.

Pag-IBIG Fund shall release to the member-borrower the Cancellation of the Deed of Assignment along with the Cancellation of Mortgage and the TCT/CCT, only upon full payment of his/her loan.

C. The DEVELOPER may substitute retention for conversion purposes with the assignable instruments, such as but not limited to the following:

Pag-IBIG Housing Bond

Certificate of Time Deposit and the other bank Certificates

Trust/Escrow Agreement

Government Securities (treasury bonds, bills, notes, etc.)

Other assignable instruments acceptable to Pag-IBIG

The Value of the instrument to be used shall be accordance with the retention rates listed above.

In case the DEVELOPER shall assign the amount retained for conversion in favor of a third party, in consideration for the latter’s assignment of any of the assignable instruments mentioned above in favor of Pag-IBIG Fund as security for the conversion of delivered CTS accounts subject of this Agreement, the amount to be released shall be net of a service fee of 0.1%of the retention value.

In case the DEVELOPER should opt use the foregoing instruments instead of retention of conversion purposes, Pag-IBIG Fund shall release to the DEVELOPER or his duly authorized representative the Deed of Cancellation of Assignment of Instrument together with the assigned instrument/s within seven (7) working days from date of submission to Pag-IBIG Fund of the following documents: a) a new TCT/CCT issued in the name of the member-borrower; b) Tax Declaration in the name of the member-borrower; c) LMA duly registered with the Registry of Deeds and annotated at the back of the new life.

The DEVELOPER shall update the annual real estate taxes on the property subject of the CTS at the time of conversion

For CTS accounts, the DEVELOPER shall execute a Deed of Absolute Sale (DOAS) in favor of the member-buyer, while for REM account; the member-borrower shall execute the Loan and Mortgage Agreement in the Favor of Pag-IBIG Fund. Upon registration of the Deed of Absolute Sale and issuance of new title In the name of member-borrower, the Loan and Mortgage Agreement shall likewise be registered with the Register of Deeds at the expense of the DEVELOPER.

Section 3.6          Deeds of Assignment with Special Power of Attorney – For CTS accounts, the DEVELOPER shall execute the deliver the individual Deeds of Assignment with SPA, assigning the CTS accounts in favor of Pag-IBIG Fund, duly annotated on the respective Transfer Certificates of Title covering the subject house and lot, or Condominium Certificates of title in the case of condominium housing projects. The DEVELOPER shall secure the conformity of member borrower to the assignment.

Section 3.7 Buyback of Accounts – in case of default, the DEVELOPER shall buyback accounts within sixty (60) calendar days from the receipt of the Notice of the buyback.

                However, within (90) days from the date of receipt of the Notice of Buyback, the DEVELOPER, may be allowed to resort to any of the following acceptable remedies:


Updating the account of the borrower; and

Replacement of the buyer through assumption of the CTS obligation/ mortgage or through a new CTS/REM.

Upon exercise of the buyback recourse, the DEVELOPER shall pay the buyback value defined as the total outstanding loan obligation of the member-borrower at point of default (inclusive of the outstanding principal balance and unpaid interest)

On the other hand, should the DEVELOPER be able to buyback the account within sixty (60)-day prescribed period, the buyback value shall be subject to a penalty equivalent to one twentieth of one percent (1/20 of 1%) thereof per day of delay, reckoned from the date of default up to the actual date of settlement.

The above values shall also be applicable in instances where the DEVELOPER fails to avail of any of the Legal remedies available or Pag-IBIG exercises its option on offsetting against subsequent takeout proceeds.

The DEVELOPER shall pay Pag-IBIG Fund in cash or check for the accounts that are due for buyback. In case of failure of the DEVELOPER to buyback the account or failure to avail of any of the acceptable remedies within the specified 90-day grace period, Pag-IBIG Fund shall offset the amount against subsequent takeout proceeds or from any amount due the DEVELOPER within five (5) calendar days from the date the 90-day grace period expires.

All amounts retained for conversion shall be applied against the buyback value point of payment offsetting.

In case of staggered/ partial payments, penalties continue to accrue against any unpaid amount beyond the sixty (60) calendar days from the receipt of Notice of Buyback. Failure to do so shall subject the buyback value to penalties, which shall be computed from date of receipt of notice up to actual date of settlement.

Upon the buyback of the account, Pag-IBIG Fund shall issue a Deed of Release/ Cancellation of Assignment (for CTS accounts) or a Deed of Assignment of the Promissory Note and the Loan and Mortgage Agreement in favor of the DEVELOPER (for EM accounts)

Section 3.8          Refund – the DEVELOPER shall refund the amount which may become due to the member-buyer who opts to avail himself of the Maceda Law (R.A6552) prior to the conversion of the CTS to REM

Section 3.9          Collection Servicing – the DEVELOPER     may enter into the Collection Servicing Agreement (CSA)with Pag-IBIG whereby the former shall act as the latter’s collecting agent to collect and receive the monthly installment payments from its member-buyers during the first two (2) years of loan repayment period and remit the same Pag-IBIG Fund subject to the terms and conditions stipulated in CSA.



Section 4.1          Funding Commitment line – Pag-IBIG Fund commits to provide end user financing for the DEVELOPER’s eligible member-user through a Funding Commitment Line (FLC) at no cost to the DEVELOPER in the amount of FIVE HUNDRED MILLION PESOS (P 5000, 000,000) subject to the following:



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Created 2014-06-26
Created by {delfin Lee}
Changed at 2014-09-25
Modified by {Globe Asiatique}