By Ben Rosario At least 22,123 Pag-IBIG Fund members are at risk of losing houses they acquired through loans on account of the failure of developers to transfer the titles of the mortgaged properties in their names. Pag-IBIG|Manila Bulletin The Commission on Audit noted in its 2017 annual audit report for the Home Development Mutual Fund (Pag-IBIG Fund) that housing loans granted the 22,123 accounts have not been converted from contract to sell (CTS) to real estate mortgages (REM), thus, putting the borrowers’ interest at risk. “Housing loan value amounting to P14.407 billion for 22,123 accounts remained outstanding/not converted from CTS to REM, exceeding the allowable seasoning period due to Pag-IBIG Fund’s non-availment of the remedies provided under HDMF Circular No. 259, as amended, resulting in the exposure of borrower’s property ownership to risk, delay and difficulty in the redemption, foreclosure and disposal of the properties and nonrecovery of the Fund’s investment in housing,” COA stated in the report. HDMF Circular no. 259 sets deadlines for the conversion of CTS into REM and therefore pave the way for the transfer of the titles of the mortgaged properties to the name of the buyer-borrowers. State auditors explained that due to the delay in the conversion, register of deeds are prevented from making annotations to the REM. This results in the nontransfer of titles of properties They warned that the overdue conversion of the loan accounts resulted in the “exposure of borrowers’ property ownership to risk.” To remedy the situation, the HDMF may require the developer to buy back the account or suspend subsequent releases of Transfer Certificate of Titles. These measures may be undertaken without “prejudice to the Fund’s right to file appropriation action in court” against the developer or any officer of its officers. “Nonconversion of the accounts from CTS to REM is… detrimental to the interest of the updated housing loan borrowers as their ownership over the property is exposed to risk,” the COA report stated. Further, Pag-IBIG would also find it difficult to foreclose or dispose of properties not coverted to REM, delaying the recovery of its housing investments. Auditors said that under the HDMF circular, the CTS accounts should be converted to REM before the 24th month of the seasoning period for Window 1 and Window 2 accounts, or the 36th month for Window 1 (Elite) accounts. However, audit examination of the HDMF indicated that there are t 14,500 accounts in the San Fernando City, Pampanga, and Cebu housing hubs that have not been converted despite the lapse of 24 months. State auditors also noted that the National Capital Region Home Lending Operation even recorded 7,077 accounts that have not been converted to mortgages for more than 37 months. The COA chided HDMF for failing to take notice of the 182 accounts by the La Union housing business center that have remained unconverted from 37 months to as long as 14 years. Responding to the audit observations, Pag-IBIG management disclosed to auditors that it encountered difficulties with inactive housing developers and lacked the records for the conversion of the concerned accounts. It also blamed the conversion delays on its "voluminous transactions." State auditors said Pag-IBIG should strictly adhere to the periods set by the circular to “prevent accumulation of long overdue CTS accounts for conversion.” They also recommended the imposition of appropriate sanctions against erring developers.