Industry Reference Practices on Sound Contract to Sell Financing

November 27, 2012BSP CIRCULAR LETTER NO. CL-2012-084TO:All Banks   SUBJECT:Industry Reference Practices on Sound Contract to Sell Financing The Bangko Sentral ng Pilipinas (BSP) hereby informs all banks of the attached "Industry Reference Practices on Sound Contract to Sell Financing". This document was jointly developed by the Bankers Association of the Philippines, Chamber of Thrift Banks, Rural Bankers Association of the Philippines and the BSP to improve industry practices governing the grant and administration of contract-to-sell financing. The reference practices set forth over-arching principles in risk recognition and management of CTS financing and general guidelines on the following key areas related to CTS financing:1. Developer accreditation,2. Project accreditation,3. Homebuyer's CTS eligibility,4. Facility availment, and5. Documentation and controls.The industry reference practices should guide banks in their operations. Banks are strongly encouraged to adopt robust practices consistent with their customer risk profile.The BSP will also be guided by these reference practices in assessing the quality of a bank's CTS lending operations. TDCAISFor information and guidance. (SGD.) NESTOR A. ESPENILLA, JR.Deputy GovernorATTACHMENTREFERENCE PRACTICES ON SOUND CONTRACT TO SELL (CTS)...