Palestine Monetary Authority

Circular No. (98/2011)
To all lending institutions operating in Palestine Date: Tuesday, May 31, 2011

Subject: Clarifications Regarding the Reporting of Demographic Data for Housing and Mortgage Loans

In continuation of our Circular No. (2011/63) issued on 19/04/2011 regarding the establishment of a dedicated database for housing and mortgage loans, and following the field visits conducted at banks and the meeting held with lending institutions at the Follow-up Company headquarters to take necessary measures to complete the project, the following clarifications address the inquiries and observations discussed during the field visits:

1. Reporting of Housing and Mortgage Loans
   The periodic reporting of the demographic file for housing and mortgage loans includes all outstanding loans as they stand on the reporting date.

2. Facility File Number
   The facility number is a key item in linking the demographic file with the financial file for housing and mortgage loans. Therefore, we emphasize the necessity of matching the facility file number reported in the demographic file with the corresponding loan file number in the monthly financial file.

3. Items Containing Amounts
   Reporting of all values shall be in the currency of the loan disbursement, except for the borrower's income currency, which shall be reported in its actual currency.

4. Exchange Rate
   The exchange rate bulletin issued by the Palestine Monetary Authority shall be relied upon for currency valuation purposes as of the reporting date.

5. Settled Loans
   Settled loans shall not be disclosed in the demographic file for housing and mortgage loans, as settlement is reported in the monthly financial file.

6. First-Grade or Higher Collateral Pledged to the Same Institution
   In the case of real estate collateral pledged in multiple grades to the same institution, only the first mortgage grade shall be reported in the mortgage grade item, and the total value of all mortgage grades shall be disclosed in the collateral value item.

7. Reporting of Appraised Value for Securitization Purposes
   Compliance with Circular No. (2011/92) issued on 25/5/2011 regarding mandatory and non-mandatory items in the reporting of housing and mortgage loans.

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8. Property Area
   Reporting of area shall be in square meters.

9. Debt-to-Net-Income Ratio
   Debt-to-Net-Income Ratio = Monthly Installment Value / Monthly Net Income or Average Income of Loan Participants, valued in the disbursement currency.

10. Formatting of Percentage in the Monthly File
    The file shall disclose the whole number without commas or percentage signs (%) (e.g., 65 instead of 65% or 0.65).

11. Collateral Value Secured Against Multiple Loans
    The collateral value provided by the borrower across multiple loans shall be calculated proportionally based on the approved limit granted for each loan.

12. Joint Loans
    For joint loans, the demographic file shall disclose only one of the co-borrowers as chosen by the institution, while the monthly income item shall disclose the total income of all loan participants. This condition does not apply to the Credit Information System instructions.

13. Grace Period
    The grace period shall be reported in months, not days.

14. Financing Term
    The financing term shall be reported in months.

15. Reporting of a Loan for Purchasing Land to Construct a Property
    This type of loan shall be reported in the field for land purchase purposes, and upon completion of the property construction, it shall be reported as a mortgage loan for the full financing amount.

16. Nature and Value of Borrower's Income
    If the borrower has more than one type of income (fixed and variable), the nature of income shall be reported as fixed income, and the income value item shall disclose the total value of both fixed and variable income.

17. Personal Loans Granted with Real Estate Collateral
    Personal or other loans granted with real estate collateral, where the purpose is non-residential or non-property-related, are considered non-targeted loans and shall not be disclosed in the demographic file.

Public Relations and Market Officers Department Palestine Monetary Authority

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