|Bank foreclosures reached 18,000 in PR as of Nov. 2010. (Credit: Víctor
Some 18,000 homeowners in Puerto Rico were facing the possibility of losing their homes to their mortgage bank as of November 2010, the Financial Institutions Commissioner’s office (OCIF, as it is known by its initials in Spanish) said Tuesday.
About 15 percent, or 2,700 homes were foreclosed upon, OCIF Deputy Commissioner Antonio Salvá said during a workshop held at the Capitol to discuss the intricacies of the island’s mortage market and alternatives available to mitigate home losses.
One of those alternatives is Senate Bill 1792, presented by New Progressive Party Sen. Lawrence Seilhammer, which seeks to amend Law 9 of 2009 — known as the Local Economic Stimulus Plan Law — to add a program to help prevent foreclosure by allowing homeowners to take out a second mortgage of up to $15,000, guaranteed by the Housing Financing Authority.
The HFA would provide a guarantee equal to 25 percent of the mortgage principal, whether to allow a moratorium on the payment of the principal or an extension of the due date of principal, as well as to reduce monthly interest payments or remove late charges, among other alternatives.
The bill was filed in October and the Senate Urbanism and Infrastructure Committee discussed it in public hearings on Nov. 5, but their report on its findings is still pending.
While Puerto Rico’s foreclosure problem has been on the rise in recent years, as a result of the protracted economic recession, cases have not been as severe as in the U.S. mainland, where millions have lost their dwellings due to an inability to meet mortgage payments.
That’s so because local banks usually try to work with the customer to mitigate the possibility of losing a home — by refinancing or modifying the mortgage loan.
Tuesday’s activity drew participation from banking executives, including representatives from Scotiabank, Banco Popular and Oriental Financial Group.
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