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  1. Join Date
    Sep 2004
    Posts
    2,976
    #11
    IMO, a subprime crisis can't happen here. Local bankers lack the sophistication of their US counterparts, and mortgage loans are not packaged here as they are in the States. Mas advanced lang talaga ang financial system nila, and even some economists there are complaining of the nature of certain securities which seems overly complicated.

    Sa Tate, mortgage loans approach the complexity of derivatives and even esoteric particle physics equations. It's getting too hard to decipher for laymen to understand. Also, there is no potent middle-class here, the type who can afford to take and amortize decent housing loans. Lastly, uber conservative din mga banko dito.

    Yung payment options din ng mortgage borrowers sa US, puwede rin ang interest lang ang bayaran, tapos balloon payments. Medyo risky yun pag dito gagawin sa Pinas, since balloon payments are not encouraged by banks for housing loans.
    Last edited by Galactus; September 17th, 2008 at 04:22 PM.

  2. Join Date
    Nov 2005
    Posts
    39,147
    #12
    Meron dito nyan.

    the NHMFC buys mortgage loans and turn them into securities po.

    National Home Mortgage Finance Corp. (our version of Fannie-Freddie)

    NHMFC then turns these mortgages around, then securitize or document them as financial currencies that they could then sell as bonds to potential investors. They are like financial intermediaries between people who would like to park their money in bonds and housing loan borrowers who signed a mortgage document where they promise to pay in a future date.

  3. Join Date
    Sep 2004
    Posts
    2,976
    #13
    ^^^ AFAIK, NHMFC only buys housing loans (AR's) from GFI's. Hindi yata kasama ang private banks. And since NHMFC is a GOCC, while SSS, Pag-IBIG and GSIS are public agencies, may pseudo-sovereign guarantee yun, unlike sa US na puro private investment and mortgage banks lang ang nagpa-package ng housing loans

    Also, technically, Fannie Mac and Freddie Mac were converted into private corporations
    Last edited by Galactus; September 17th, 2008 at 04:46 PM.

  4. Join Date
    Oct 2002
    Posts
    3,872
    #14
    Quote Originally Posted by Galactus View Post
    IMO, a subprime crisis can't happen here. Local bankers lack the sophistication of their US counterparts, and mortgage loans are not packaged here as they are in the States. Mas advanced lang talaga ang financial system nila, and even some economists there are complaining of the nature of certain securities which seems overly complicated.

    Sa Tate, mortgage loans approach the complexity of derivatives and even esoteric particle physics equations. It's getting too hard to decipher for laymen to understand. Also, there is no potent middle-class here, the type who can afford to take and amortize decent housing loans. Lastly, uber conservative din mga banko dito.

    Yung payment options din ng mortgage borrowers sa US, puwede rin ang interest lang ang bayaran, tapos balloon payments. Medyo risky yun pag dito gagawin sa Pinas, since balloon payments are not encouraged by banks for housing loans.
    This is what I wanted to know, actually. Are the securities bought/sold by NHMFC traded over the counter like those in the US? Parang wala kasi akong makitang ganun na exchange dito.

  5. Join Date
    Jun 2005
    Posts
    787
    #15
    Quote Originally Posted by Altis6453 View Post
    This is what I wanted to know, actually. Are the securities bought/sold by NHMFC traded over the counter like those in the US? Parang wala kasi akong makitang ganun na exchange dito.
    The short answer is no.

  6. Join Date
    Aug 2007
    Posts
    820
    #16
    ^ Thanks for all your replies...appreciate it.

    It was very informative...I just do hope that with the current inflation that we have now would not contribute to something similar to this...and it is quite reassuring to know that our system in the philippines are still sound and working properly.

  7. Join Date
    Aug 2008
    Posts
    1,099
    #17
    in addition, people in the States are required to get out of their parent's shadow by 18 or so. and so they have to get a place of their own. imagine 18, and you have to get your own place. pano yun? syempre loans.

    unlike here, when teenagers turn 18, ang magbabago lang siguro eh yun posters mo sa kwarto. kung dati si winnie the pooh or transformers, ngaun movie or rock idols naman. pinoys can also stay as long as they like in a parent's house. kahit 40 ka na. kahit mag-asawa ka, mag-kaanak puwede pa din kay papa.

  8. Join Date
    Jul 2005
    Posts
    494
    #18
    Hindi na mangyayari dito sa pinay and subprime or ala Lehman Bros dahil dapat naman natututo na tayo from the US mistakes. Another thing, it's fairly recent that many of the working class Filipinos are learning to live off their credit card limits. I think the aggressive manner of credit card companies of practically shoving their cards to employees will be tempered.

    The Americans have been consuming the products of the world (mostly from China and Japan) by borrowing from the world (actually mostly from the savings of Asians). The problem is if Americans temper their voracious appettite they would be buying less from the world which may lead to global slowdown unless the rest of the world increases their appetite and consume their own produce.

  9. Join Date
    Dec 2005
    Posts
    39,024
    #19

    I'd say not yet.... The current situation and outlook here in our country will not support or encourage such scenario as the one in the US..... Marami pa ring takot mangutang dito....

    6707:choir:

  10. Join Date
    Aug 2004
    Posts
    22,710
    #20
    Quote Originally Posted by creepy View Post
    Financing companies relaxed their credit standards and offered very low initial monthly payments for "subprime" borrowers who wanted to buy homes. But these monthly payments step up sharply after a couple of years, leading to the defaults of many subprime borrowers who can't meet the higher payments.

    For those in the Philippines, look around you... doesn't this sound very familiar? Check out all the "easy payment schemes" of a number of real estate companies who advertise that you can buy a condo for "only P12k a month".

    And wasn't it just recently that we've been reading about this big condo boom locally?
    Well... this is a bit different... you can't pay for the condo, it reverts to the company and they just sell it to another sucker... errh... buyer (I know some people who were conned into this because they didn't read the fine print). In the US, with double-mortgages and all that, people were piling money on top of bad money and they flooded the market... in the Philippines, not enough people are investing in new housing to make this possible... and the Asian crisis, IMHO, was our crisis. Same problem... people putting more money tha logic or even wild fantasy would dictate was the going price for those land developments... there are huge empty subdivisions left over from this crisis...

    Quote Originally Posted by slamtaz View Post
    YES & NO...


    If the Asian Financial Crisis in the late 90's did not happen, malamang na it would have paved the way for a more relaxed lending environment typical of what happened in the US.


    When the crisis hit, Philippine bank lending practices were already relaxed and in the continuous process of futher being relaxed as they are, among others, making a killing on profits, as indicated by the following:
    • Percentage of Loan Amount vs Collateral Value was starting to increase from what used to be a 60% standard loan to collateral value
    • Adherence to Financial Statement Ratios of borrowers were slowly being deviated and it's getting easier to secure deviation approvals
    • Introduction of derivative lending practices led to the low priced dollar & yen (i.e. so-called samurai loans) swap loans. This made borrowers very eager to borrow because of low finance rates and banks very eager to lend because of relatively lenient requirements and very good yield (i.e. spelled as "GREED")
    • The equivalent of the sub-prime mortgage was starting to build up on the commercial level or should i say, already rampant to a certain extent and had it cascaded down to the consumer level, then it would have wreaked greater havoc
    Among other reasons, the bubble burst when so-called dragon economies in asia could no longer sustain the artificial growth and the forex market could no longer hold on to the artificially high php25:$1 exchange level (i.e. with equivalent scenario in other asian countries) because of trading & market forces in asia.

    :boom:

    Just imagine, what used to be a $1 million dollar swap loan at php25:$1 exchange rate where the borrower got a net proceed of php25,000,000 and paying low single digit loan rates, though still a $1 million dollar loan...






    ...suddenly becomes a php40,000,000 loan because of the currency adjustment to php40:$1... Thats a 60% increase in principal that the borrower has to pay but did not enjoy a single penny of it... Chain reaction na ang kasunod...
    • Borrower could not pay sudden hike in payments due.
    • Banks collateral cover suddenly is short (i.e. if what used to be the php25MM loan was 70% secured by a php 36MM real estate collateral, it is now a 40MM loan vs 36MM collateral.
    • To regain required regulatory collateral position, bank needs additional collateral from borrower or make him pay the difference or increase the banks, unsecured loan position (i.e. the latter of which will screw the banks adequacy rating, while the other two will screw the borrower and simply not feasible)
    • Borrower defaults, Bank liquidity suffers
    • etc. etc. etc.
    In short, it has all the makings of a grand bubble pero naudlot at hindi gaano napilay.

    Remember, nauso after the crisis yung property auctions held by banks and even those sold to foreign banks at a steep discounts to dispose of the non-performing assets.

    Had the bubble expanded and lasted a couple more years and the so-called artificial dragon economy played longer by the puppets and puppeteers, it would have been a bigger, louder
    :boom::boom::boom::boom:

    p.s. it has been a while and i'm trying to recall the facts since it happened kaya paki-correct na lang po kung meron akong na-miss or something similar...
    We were victims of this... imagine around 200+++ million in loans suddenly ballooning into nearly half a billion? We've only just finished paying off the extra surcharge from that.

    Other companies weren't so lucky. I think RJ Jacinto was one of the hardest hit... he'd been expanding businesses like mad right before the bubble burst, and he lost a ton of money. Good thing he's recovering now, too.

    Ang pagbalik ng comeback...

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Subprime Mortgage Crisis sa Pinas - Can it happen?