Alarming foreclosures

I have developed the habit of reading a great part of any newspaper I happen to hold. Making use of whatever little thing there is on hand is a lesson from my old folks. Sports stories, being, to me, more credible than headline news emanating from Malacañang rate preferential reading. Then, I do not miss the classified ads after browsing through the opinions of practically all columnists. 

Lately, the announcements of foreclosures of real estate mortgages which we usually find in the inside pages of our dailies have caught my attention. They are far more numerous than in times past, perhaps indicative of tough times.

The more alarming foreclosures are those involving small parcels of land. The area I am talking about fits the cuts of lots used for low cost housing. Considering that the foreclosing entity is invariably the agency that is the most common source of housing loan funds, I have come to the conclusion that these must be housing loans.

I surmise that the affected ones must be those who need the housing more. And judging from the sizes of these lots, the owners must likewise fall into the category of being starter home-owners. Yet, if that be the case, why are they giving up on what could be prized possessions?

Low cost housing, by nature, is the initial step of people desiring to acquire homes. More often than not, they involve young couples or families from the lower middle-income group. The price range is somewhere in the vicinity of half a million pesos.

According to industry practices, a family can move in to occupy a new home for an equity of ten percent of the price. Taking cue from the price range, a new home-owner dishes out something like a hundred thousand pesos or less. Paying the balance is even more enticing because the installment plan, usually spread in a period of so many years, appears minimal and affordable. 

I knew of a number of couples excited by the thought of each owning a house they called their very own. I saw genuine happiness as they welcomed me to their doors. Pride was manifest. It did not matter that their abodes were modest. The excitement I noticed lasted for months. Then, they began to wish living in more spacious homes. Their growing children had to have a wider space to play. They needed a garage for a newly acquired cab or a lawn or a foyer. All told, the size of their low cost home was shrinking!

It came to pass that they gave up their homes. Even the reality that they had to treat their initial monetary outlay as lost investments did not faze them. What loomed brighter to them was the idea of stepping into a bigger house. Failing (this should read refusing) thus to pay subsequent installments resulted in foreclosures.

 Bad economy, not the desire to live in larger dwellings, may also be the underlying cause for the current rash of foreclosures. The failure to generate the kind of money needed to pay maturing obligations could have forced these actions. Departure for distant places could be another cause.

 Whatever might have moved mortgagees to sell, at public auctions, collaterals on hand, needs to be carefully monitored. Their rising volume indicates a problem. Government has to move quickly in. If there be such efforts similar to the American stimulus package it can hatch, let it be drawn now. The idea is both to help low cost home-owners and to shore up dwindling loan funds.

Rather than giving dole outs to some slum dwellers in Metro Manila, our fiscal managers must consider investing where monies not only earn returns but more importantly are used to drive the engines of economy. I am positive in the thought that helping these low cost home owners is actually propping up our economy the alternative being to put these houses in state of total waste a situation which I don’t think we can afford.

* * *

Email: [email protected]