REAL ESTATE MORTGAGE NUMBER OF MORTGAGES IN ONE PROPERTY

 You may have more than one

REQUISITES : ESSENTIAL TO PLEDGE AND MORTGAGE  Only 1st mortgagee is registered
[ART 2086]  There’s a junior and senior mortgagees
(1) Secure fulfillment of Principal Obligation
(2) Pledgor/Mortgagor : Absolute Owner of thing Pledged or Mortgaged FOREIGNERS
(3) Persons Constituting it : Free disposal of property & in absence –legally  Can be mortgagees
authorized for that purpose  Mortgage is not a disposition of property
PARTIES (1) Creditor/ Mortgagee
(2) Debtor/Mortgagor WHEN THERE IS DEFAULT
OBJECT Real Property  Usual remedies (1) Specific Performance + Damages [collection] (2)
CAUSE Same as Principal Obligation Foreclose
FORM [Art 2025]  DR: Judicial foreclosure under Rule 68 ROC
- Recording in the registry of property binds third  JSP: Costly mistake. Stipulate extra-judicial foreclosure in the mortgage
persons contract / some other mode of disposition
- Nevertheless : even without –still binding between  Rule 68: SUMMARY
parties
(1) Complaint : stating ultimate facts (cause of action) –RTC having
jurisdiction over the property
REM vs. Pledge
(2) Entry of judgment
 DR: (x) delivery
- Debtor ordered to pay within period of NOT LESS THAN 90 nor MORE
 EX: Stipulation
THAN 120 days from entry of judgment
(3) Equity of Redemption
STEPS
- Period within which debtor should pay the creditor
(1) Make a Mortgage contract
- May be extended even beyond 120 days
- Parties
(4) Foreclosure
- Purpose
- Non-payment within period above triggers this
- Signed by the Parties
GR No right of redemption after foreclosure
(2) Notarization
EX Law or contract allows redemption/ repurchase
- Anywhere
(3) Pay Documentary Stamp Tax
(5) Auction
- Where property is
- Made by the sheriff
(4) Pay Real Property Tax
(6) Sale
- Treasurer’s Office
PROCEEDS APPLICATION
(5) Registry of Deeds
(1) Cost
- Mortgage document
(2) Principal obligation
- Owners Duplicate and Original Certificate of Title
(3) Balance, if any will be given based on the determination of the court who’s
- RPT
entitled to it not necessarily the mortgagor ; it can be other creditors
GR If there’s excess and there’s no other creditor/claimant :
DISPOSITION/ALIENATION excess will go to mortgagor
 (x) prohibit DEFICIENCY There can always be recovery whether foreclosure is
 You can require notice be given judicial/extra-judicial
 - You just need to file a motion for court to render
deficiency judgment
REGISTRATION BY WINNING BIDDER
(1) Pay the necessary taxes (DST, CGT, Registration fees, update realty taxes
(2) Register property in his own name
RULE 68
Foreclosure of Real Estate Mortgage
Section 1. Complaint in action for foreclosure. — In an action for the foreclosure of a
mortgage or other encumbrance upon real estate, the complaint shall set forth the date
and due execution of the mortgage; its assignments, if any; the names and residences of
the mortgagor and the mortgagee; a description of the mortgaged property; a
statement of the date of the note or other documentary evidence of the obligation
secured by the mortgage, the amount claimed to be unpaid thereon; and the names and
residences of all persons having or claiming an interest in the property subordinate in
right to that of the holder of the mortgage, all of whom shall be made defendants in the
action. (1a)
Section 2. Judgment on foreclosure for payment or sale. — If upon the trial in such
action the court shall find the facts set forth in the complaint to be true, it shall
ascertain the amount due to the plaintiff upon the mortgage debt or obligation,
including interest and other charges as approved by the court, and costs, and shall
render judgment for the sum so found due and order that the same be paid to the court
or to the judgment obligee within a period of not less than ninety (90) days nor more
than one hundred twenty (120) days from the entry of judgment, and that in default of
such payment the property shall be sold at public auction to satisfy the judgment. (2a)
Section 3. Sale of mortgaged property; effect. — When the defendant, after being
directed to do so as provided in the next preceding section, fails to pay the amount of
the judgment within the period specified therein, the court, upon motion, shall order the
property to be sold in the manner and under the provisions of Rule 39 and other
regulations governing sales of real estate under execution. Such sale shall not affect
the rights of persons holding prior encumbrances upon the property or a part thereof,
and when confirmed by an order of the court, also upon motion, it shall operate to
divest the rights in the property of all the parties to the action and to vest their rights in
the purchaser, subject to such rights of redemption as may be allowed by law.
Upon the finality of the order of confirmation or upon the expiration of the period of
redemption when allowed by law, the purchaser at the auction sale or last
redemptioner, if any, shall be entitled to the possession of the property unless a third
party is actually holding the same adversely to the judgment obligor. The said
purchaser or last redemptioner may secure a writ of possession, upon motion, from the
court which ordered the foreclosure. (3a)
ACT 3135
Section 4. Disposition of proceeds of sale. — The amount realized from the foreclosure
sale of the mortgaged property shall, after deducting the costs of the sale, be paid to
the person foreclosing the mortgage, and when there shall be any balance or residue,
after paying off the mortgage debt due, the same shall be paid to junior encumbrancers
in the order of their priority, to be ascertained by the court, or if there be no such
encumbrancers or there be a balance or residue after payment to them, then to the
mortgagor or his duly authorized agent, or to the person entitled to it. (4a)
Section 5. How sale to proceed in case the debt is not all due. — If the debt for which
the mortgage or encumbrance was held is not all due as provided in the judgment as
soon as a sufficient portion of the property has been sold to pay the total amount and
the costs due, the sale shall terminate; and afterwards as often as more becomes due
for principal or interest and other valid charges, the court may, on motion, order more
to be sold. But if the property cannot be sold in portions without prejudice to the
parties, the whole shall be ordered to be sold in the first instance, and the entire debt
and costs shall be paid, if the proceeds of the sale be sufficient therefor, there being a
rebate of interest where such rebate is proper. (5a)
Section 6. Deficiency judgment. — If upon the sale of any real property as provided in
the next preceding section there be a balance due to the plaintiff after applying the
proceeds of the sale, the court, upon motion, shall render judgment against the
defendant for any such balance for which, by the record of the case, he may be
personally liable to the plaintiff, upon which execution may issue immediately if the
balance is all due at the time of the rendition of the judgment; otherwise; the plaintiff
shall be entitled to execution at such time as the balance remaining becomes due under
the terms of the original contract, which time shall be stated in the judgment. (6a)
Section 7. Registration. — A certified copy of the final order of the court confirming
the sale shall be registered in the registry of deeds. If no right of redemption exists, the
certificate of title in the name of the mortgagor shall be cancelled, and a new one
issued in the name of the purchaser.
Where a right of redemption exists, the certificate of title in the name of the mortgagor
shall not be cancelled, but the certificate of sale and the order confirming the sale shall
be registered and a brief memorandum thereof made by the registrar of deeds upon the
certificate of title. In the event the property is redeemed, the deed of redemption shall
be registered with the registry of deeds, and a brief memorandum thereof shall be made
by the registrar of deeds on said certificate of title.
If the property is not redeemed, the final deed of sale executed by the sheriff in favor of
the purchaser at the foreclosure sale shall be registered with the registry of deeds;
whereupon the certificate of title in the name of the mortgagor shall be cancelled and a
new one issued in the name of the purchaser. (n)
Section 8. Applicability of other provisions. — The provisions of sections 31, 32 and
34 of Rule 39 shall be applicable to the judicial foreclosure of real estate mortgages
under this Rule insofar as the former are not inconsistent with or may serve to
supplement the provisions of the latter. (8a)
 - In extra-judicial foreclosure : there must be a stipulation in the mortgage once a week for at least three consecutive weeks in a newspaper of general circulation in
contract/document attached basically granting SPA to mortgagee to the municipality or city.
conduct foreclosure extrajudicially
Sec. 4. The sale shall be made at public auction, between the hours or nine in the morning
- Conducted by Sheriff or notary public and four in the afternoon; and shall be under the direction of the sheriff of the province, the
justice or auxiliary justice of the peace of the municipality in which such sale has to be
WHO - You have to ask someone to do sale for you made, or a notary public of said municipality, who shall be entitled to collect a fee of five
- Go to relevant court, apply, pay filling fees sheriff pesos each day of actual work performed, in addition to his expenses.
assigned for you
Sec. 5. At any sale, the creditor, trustee, or other persons authorized to act for the creditor,
may participate in the bidding and purchase under the same conditions as any other bidder,
WHERE - In the province where the property is located unless the contrary has been expressly provided in the mortgage or trust deed under which
WHEN - Between 9 am to 4pm the sale is made.
- If done outside, you have to assail it
NOTICE - Mere publication is sufficient Sec. 6. In all cases in which an extrajudicial sale is made under the special power
REQUIREMENT - Personal notice requirement, only requirement is hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or
judgment creditor of said debtor, or any person having a lien on the property subsequent to
posting publication in a newspaper of general
the mortgage or deed of trust under which the property is sold, may redeem the same at any
circulation time within the term of one year from and after the date of the sale; and such redemption
- Posting notices of same for not less than 20 days shall be governed by the provisions of sections four hundred and sixty-four to four hundred
in at least 3 public places and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not
- Once a week for at least 3 consecutive weeks in inconsistent with the provisions of this Act.
newspaper of general circulation in the city or
municipality Sec. 7. In any sale made under the provisions of this Act, the purchaser may petition the
REDEMPTION - Purchas price tendered during the auction Court of First Instance of the province or place where the property or any part thereof is
situated, to give him possession thereof during the redemption period, furnishing bond in an
PRICE - Winning bid at time of auction amount equivalent to the use of the property for a period of twelve months, to indemnify
REDEMPTION - 1 year from the date of registration of the sale the debtor in case it be shown that the sale was made without violating the mortgage or
PERIOD without complying with the requirements of this Act. Such petition shall be made under
oath and filed in form of an ex parte motion in the registration or cadastral proceedings if
the property is registered, or in special proceedings in the case of property registered under
ACT NO. 3135 - AN ACT TO REGULATE THE SALE OF PROPERTY UNDER the Mortgage Law or under section one hundred and ninety-four of the Administrative
SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES Code, or of any other real property encumbered with a mortgage duly registered in the
office of any register of deeds in accordance with any existing law, and in each case the
clerk of the court shall, upon the filing of such petition, collect the fees specified in
paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and
Section 1. When a sale is made under a special power inserted in or attached to any real- ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the
estate mortgage hereafter made as security for the payment of money or the fulfillment of court shall, upon approval of the bond, order that a writ of possession issue, addressed to
any other obligation, the provisions of the following election shall govern as to the manner the sheriff of the province in which the property is situated, who shall execute said order
in which the sale and redemption shall be effected, whether or not provision for the same is immediately.
made in the power.
Sec. 8. The debtor may, in the proceedings in which possession was requested, but not later
Sec. 2. Said sale cannot be made legally outside of the province in which the property sold than thirty days after the purchaser was given possession, petition that the sale be set aside
is situated; and in case the place within said province in which the sale is to be made is and the writ of possession cancelled, specifying the damages suffered by him, because the
subject to stipulation, such sale shall be made in said place or in the municipal building of mortgage was not violated or the sale was not made in accordance with the provisions
the municipality in which the property or part thereof is situated. hereof, and the court shall take cognizance of this petition in accordance with the summary
procedure provided for in section one hundred and twelve of Act Numbered Four hundred
Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty days in and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his
at least three public places of the municipality or city where the property is situated, and if favor of all or part of the bond furnished by the person who obtained possession. Either of
such property is worth more than four hundred pesos, such notice shall also be published the parties may appeal from the order of the judge in accordance with section fourteen of
 Act Numbered Four hundred and ninety-six; but the order of possession shall continue in
effect during the pendency of the appeal.
Sec. 9. When the property is redeemed after the purchaser has been given possession, the
redeemer shall be entitled to deduct from the price of redemption any rentals that said
purchaser may have collected in case the property or any part thereof was rented; if the
purchaser occupied the property as his own dwelling, it being town property, or used it
gainfully, it being rural property, the redeemer may deduct from the price the interest of
one per centum per month provided for in section four hundred and sixty-five of the Code
of Civil Procedure.
Sec. 10. This Act shall take effect on its approval.
Approved: March 6, 1924
RULE 39
WHO MAY -(a) The judgment obligor; or his successor in
REDEEM interest in the whole or any part of the property;
- (b) A creditor having a lien by virtue of an
attachment, judgment or mortgage on the property
sold, or on some part thereof, subsequent to the
lien under which the property was sold. Such
redeeming creditor is termed a redemptioner. (29a)
HOW Within 1 year from date of registration of the sale
REDEMPTION - Purchase price of the winning bidder
PRICE - + real property taxes and assessments
JSP : not advisable to redeem : mortgagor exposes property to the mortgagee ; just
sue for deficiency
RULE 39
Execution, Satisfaction and Effect of Judgments
Section 27. Who may redeem real property so sold. — Real property sold as provided in
the last preceding section, or any part thereof sold separately, may be redeemed in the
manner hereinafter provided, by the following persons:
(a) The judgment obligor; or his successor in interest in the whole or any part of the
property;
(b) A creditor having a lien by virtue of an attachment, judgment or mortgage on the
property sold, or on some part thereof, subsequent to the lien under which the property was
sold. Such redeeming creditor is termed a redemptioner. (29a)
Section 28. Time and manner of, and amounts payable on, successive redemptions; notice
to be given and filed. — The judgment obligor, or redemptioner, may redeem the property
from the purchaser, at any time within one (1) year from the date of the registration of the
certificate of sale, by paying the purchaser the amount of his purchase, with the per
centum per month interest thereon in addition, up to the time of redemption, together with
the amount of any assessments or taxes which the purchaser may have paid thereon after
purchase, and interest on such last named amount at the same rate; and if the purchaser be
also a creditor having a prior lien to that of the redemptioner, other than the judgment
under which such purchase was made, the amount of such other lien, with interest.
Property so redeemed may again be redeemed within sixty (60) days after the last
redemption upon payment of the sum paid on the last redemption, with two per
centum thereon in addition and the amount of any assessments or taxes which the last
redemptioner may have paid thereon after redemption by him, with interest on such last
named amount, and in addition, the amount of any liens held by said last redemptioner
prior to his own, with interest. The property may be again, and as often as a redemptioner
is so disposed, redeemed from any previous redemptioner within sixty (60) days after the
last redemption, on paying the sum paid on the last previous redemption, with two per
centum thereon in addition, and the amounts of any assessments or taxes which the last
previous redemptioner paid after the redemption thereon, with interest thereon, and the
amount of any liens held by the last redemptioner prior to his own, with interest.
Written notice of any redemption must be given to the officer who made the sale and a
duplicate filed with the registry of deeds of the place, and if any assessments or taxes are
paid by the redemptioner or if he has or acquires any lien other than that upon which the
redemption was made, notice thereof must in like manner be given to the officer and filed
with the registry of deeds; if such notice be not filed, the property may be redeemed without
paying such assessments, taxes, or liens. (30a)
Section 29. Effect of redemption by judgment obligor, and a certificate to be delivered and
recorded thereupon; to whom payments on redemption made. — If the judgment obligor
redeems he must make the same payments as are required to effect a redemption by a
redemptioner, whereupon, no further redemption shall be allowed and he is restored to his
estate. The person to whom the redemption payment is made must execute and deliver to
him a certificate of redemption acknowledged before a notary public or other officer
authorized to take acknowledgments of conveyances of real property. Such certificate must
be filed and recorded in the registry of deeds of the place in which the property is situated
and the registrar of deeds must note the record thereof on the margin of the record of the
certificate of sale. The payments mentioned in this and the last preceding sections may be
made to the purchaser or redemptioner, or for him to the officer who made the sale. (31a)
Section 30. Proof required of redemptioner. — A redemptioner must produce to the officer,
or person from whom he seeks to redeem, and serve with his notice to the officer a copy of
the judgment or final order under which he claims the right to redeem, certified by the clerk
of the court wherein the judgment or final order is entered, or, if he redeems upon a
mortgage or other lien, a memorandum of the record thereof, certified by the registrar of
deeds, or an original or certified copy of any assignment necessary to establish his claim;
and an affidavit executed by him or his agent, showing the amount then actually due on the
lien. (32a)
Section 31. Manner of using premises pending redemption; waste restrained. — Until the
expiration of the time allowed for redemption, the court may, as in other proper cases,
restrain the commission of waste on the property by injunction, on the application of the
purchaser or the judgment obligee, with or without notice; but it is not waste for a person
in possession of the property at the time of the sale, or entitled to possession afterwards,
during the period allowed for redemption, to continue to use it in the same manner in which
it was previously used, or to use it in the ordinary course of husbandry; or to make the
necessary repairs to buildings thereon while he occupies the property. (33a)
Section 32. Rents, earnings and income of property pending redemption. — The purchaser
or a redemptioner shall not be entitled to receive the rents, earnings and income of the
property sold on execution, or the value of the use and occupation thereof when such
property is in the possession of a tenant. All rents, earnings and income derived from the
 property pending redemption shall belong to the judgment obligor until the expiration of Redemption price : amount of Amount paid by the winning bidder
his period of redemption. (34a) principal obligation
Section 33. Deed and possession to be given at expiration of redemption period; by whom JUDICIAL – 1 year from sale 1 year redemption period
executed or given. — If no redemption be made within one (1) year from the date of the
registration of the certificate of sale, the purchaser is entitled to a conveyance and
(registration)
possession of the property; or, if so redeemed whenever sixty (60) days have elapsed and EXTRAJUDICIAL
no other redemption has been made, and notice thereof given, and the time for redemption - Natural person: 1 year from
has expired, the last redemptioner is entitled to the conveyance and possession; but in all registration
cases the judgment obligor shall have the entire period of one (1) year from the date of the - Juridical person : 90 days or
registration of the sale to redeem the property. The deed shall be executed by the officer until registration [whichever
making the sale or by his successor in office, and in the latter case shall have the same comes first]
validity as though the officer making the sale had continued in office and executed it.
Winning bidder immediately takes Upon foreclosure : Mortgagor will
Upon the expiration of the right of redemption, the purchaser or redemptioner shall be
substituted to and acquire all the rights, title, interest and claim of the judgment obligor to possession of propert continue possession of property
the property as of the time of the levy. The possession of the property shall be given to the - If winning bidder wants to
purchaser or last redemptioner by the same officer unless a third party adversely to the get possession ; winning
judgment obligor. (35a) bidder must file an action to
get possession and secure a
writ of possession
SEC 47: GENERAL BANKING LAW
WHAT Mortgagor : Juridical person INTEREST
Mortgagee: Bank  6% PA
PERIOD Right to redeem –only for a period of 90 days or until registration of
sale [whichever comes first]

Section 47. Foreclosure of Real Estate Mortgage. - In the event of foreclosure, whether
judicially or extra-judicially, of any mortgage on real estate which is security for any loan
or other credit accommodation granted, the mortgagor or debtor whose real property has
been sold for the full or partial payment of his obligation shall have the right within one
year after the sale of the real estate, to redeem the property by paying the amount due
under the mortgage deed, with interest thereon at rate specified in the mortgage, and all
the costs and expenses incurred by the bank or institution from the sale and custody of said
property less the income derived therefrom. However, the purchaser at the auction sale
concerned whether in a judicial or extra-judicial foreclosure shall have the right to enter
upon and take possession of such property immediately after the date of the confirmation of
the auction sale and administer the same in accordance with law. Any petition in court to
enjoin or restrain the conduct of foreclosure proceedings instituted pursuant to this
provision shall be given due course only upon the filing by the petitioner of a bond in an
amount fixed by the court conditioned that he will pay all the damages which the bank may
suffer by the enjoining or the restraint of the foreclosure proceeding. Notwithstanding Act
3135, juridical persons whose property is being sold pursuant to an extrajudicial
foreclosure, shall have the right to redeem the property in accordance with this provision
until, but not after, the registration of the certificate of foreclosure sale with the applicable
Register of Deeds which in no case shall be more than three (3) months after foreclosure,
whichever is earlier. Owners of property that has been sold in a foreclosure sale prior to
the effectivity of this Act shall retain their redemption rights until their expiration. (78a)

GBA ACT 3135