JUDICIAL FORECLOSURE

Natasha Kim N. Goco

FORECLOSURE
O Remedy available to the mortgagee by

which he subjects the mortgaged property to the satisfaction of the obligation, to secure which the mortgage was given O Mortgage may be foreclosed by:
When the principal obligation is not paid

when due When any condition, stipulation, or warranty is violated by the mortgagor 2 KINDS OF FORECLOSURE: JUDICIAL & EXTRAJUDICIAL

JUDICIAL FORECLOSURE OF MORTGAGE

O Must
O

O
O

O O

be done in accordance with the provisions of Rule 68 of the Rules of Court A certified copy of the final order of the Court confirming the sale should be registered with the Registrar of Deeds NO RIGHT OF REDEMPTION: title will be cancelled & new certificate will be issued WITH RIGHT OF REDEMPTION: certificate of sale and order confirming sale shall be registered Deficiency in judgment may be asked For Non- Redemption: must comply with PD 1529

JUDICIAL FORECLOSURE
O Nature of Action: Action Quasi in

Rem O Venue: RTC of the province where the land or an part thereof lies (Sec. 2, Rule 4, ROC) Parties may agree on other venue If situated in different provinces: the RTC of any of the said provinces

CONTENTS OF COMPLAINT
1. 2. 3. 4. 5.

6. 7.

Date of and due execution of the mortgage Assignments, if any Names and residences of mortgagor and mortgagee Description of mortgaged premises Statement of the date of the note or other obligation secured by the mortgage Amount claimed to be unpaid Names and residences of all persons having or claiming an interest in the premises subordinate in right to that of the holder of the mortgage

REGISTRATION
O If mortgage was foreclosed judicially, a certified copy of the final

order of the court confirming the sale shall be registered with the Registrar of Deeds; if there is no right of redemption, the certificate of title of the mortgagor shall be cancelled & a new certificate shall be issued in the name of the purchaser O If there is right of redemption: certificate of title shall not be cancelled, but the certificate of sale & order confirming the sale shall be registered by a brief memorandum thereof made by the ROD upon the certificate of title O Section 63, P.D. 1529: In case of non-redemption, the purchaser shall file with the ROD, either a final deed of sale executed by the person authorized by with virtue of power f attorney embodied in the deed of mortgage, or his sworn statement attesting the fact of non-redemption; whereupon the ROD shall issue a new certificate in favor of the purchaser after the owners duplicate copy of the certificate has been previously delivered & cancelled

O Right

of Action to foreclose a mortgage prescribes after 10 years (Art. 1142, NCC) O Court has jurisdiction to grant attachment against property of the debtor O Judgment on Foreclosure (Sec.2, Rule 68, ROC)

SALE OF PROPERTY
O Right of Redemption (Sec. 3, Rule 68, ROC) O There is NO RIGHT of REDEMPTION from a Judicial

Foreclosure after the confirmation of the sale, EXCEPT those granted by banks or banking institutions as provided by the General Banking Act O If property is subject to two successive mortgages & the first one is foreclosed: second mortgage is extinguished & buyer in the foreclosure sale acquires title to the property O Disposition of Proceeds of Sale (Sec.4 Rule 68, ROC) O Title passes to purchaser as soon as sale is

confirmed in Court O Cancellation of Sale

DEFICIENCY IN JUDGMENT AFTER FORECLOSURE SALE (Sec. 6, Rule 68, ROC)

O Deficiency Judgment: balance of the

indebtedness after applying the proceeds of the sale of the mortgaged property to such indebtedness and is necessarily filed after the foreclosure proceedings O Prescribes after 10 years (Arts. 1142 & 1144, NCC)

 EFFECT WHERE MORTGAGEE FILES A

PERSONAL ACTION: A mortgagee who sues & obtains a personal judgment against a mortgagor upon his credit waives thereby his right to enforce the mortgage securing it. (Industrial Finance Corp. vs Apostol, 177 SCRA 521) Registration of Final Record of a foreclosure proceeding is required (Sec.7, Rule 68, ROC) Second mortgagee has the right to be joined as party defendant together with mortgagor