Quoted hereunder is the full text of the subject resolution passed by the Board of Commissioners in its 273rd Regular Meeting on 12 May 1999:

œWHEREAS, verified official reports of interim financing or its analogous deferred loan take-out schemes by real estate developers or brokers have come to the attention of this Board, thus, generating grave concerns for its possible uncontrolled proliferation;

WHEREAS, the scheme attracts real estate buyers of subdivision lots or condominium units to tender a prepayment of their expected or future bank loan or financing amortizations in favor of the developer in amounts approximately equivalent to the loan repayment installments and prior to the actual release by banks or other government financing institutions of the loan proceeds;

WHEREAS, the scheme allows the real estate developer to retain and appropriate as business income the interest components of every buyer ™s monthly amortizations, and remits the balance or the principal components thereof to the Banks or GFIs for the reported reduction or shortening by Banks or GFIs of the expected or yet undetermined period of the loan settlement;

WHEREAS, private or government-owned or controlled banking entities are not made parties to these financing schemes to ensure faithful compliance therewith and to protect the interest of the buying public;

WHEREAS, the financing schemes have resulted in numerous suits or disputes among its parties who accuses each other of non-payment, non-submission of proper documentary requisites for loan processing, non-procurement of government permits or licenses, or deliberate acts of delay and other malicious designs to foreclose the facilitation of loan applications, thereby, creating an undue atmosphere of suspicion and hostility among buyers and developers, and eventually eroding public trust in the effectiveness of HLURB to protect and enforce public policy and the interest of the public as a whole.

NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to discourage and forbid the practice of interim loan financing or deferred loan take-out scheme as a form of developer-loan origination or as an alternative to government-approved bank-loan origination to dispel and thwart any further causes of misunderstanding and controversy in the real estate industry.

APPROVED, 12 May 1999, Quezon City, Metro Manila."

For your guidance and information.

Adopted: 12 May 1999

(SGD.) ROMULO Q. FABUL
Commissioner and Chief Executive Officer