FORECLOSURE

PROCEEDING
 Pactum
Commissorium
 Pactum Commissorium
1.Stipulationisnullandvoiditissaidtobecontrarytogood
moralsandpublicpolicy

2.Requisites:
a.Thereshouldbeapledge,mortgage,antichresisofpropertyby
wayofsecurityforthepaymentofthe
principalobligation
b.Stipulationfortheautomaticappropriationofthepropertyin
favorofthecreditorupondefaultofthedebtor/pledgor

3.Effectonthesecuritycontractdoesntaffectsubstantiallythe
principalcontractofpledge,mortgageorantichresiswithregardto
itsvalidityandefficacy.

Art.2088oftheCivilCode.
 Kinds of Foreclosure
Judicial Foreclosure
Rule 68 of the Rules of Court

Extrajudicial Foreclosure
Act No. 3135 as amended by Act No.4118
[A.M. No. 99-10-05-0.August 7, 2001]
[OCA Circular No.7-2002]
 EXTRAJUDICIAL
FORECLOSURE
BUTIPADITOMAYCLOSURE.SA
EXmoWALA.
 Act No. 3135 as
amended by Act
No.4118
[A.M. No. 99-10-05-0. August 7, 2001]
[OCA Circular No.7-2002]
 Authority to Sell
1.There must be a special power of
attorney inserted in or attached to the
real estate mortgageauthorizing the
sale pursuant to the provisions of Act,
3135, as amended (Section 1.)
 Authority to Sell
The authority to sell is not extinguished
by the death of the mortgagor (or
mortgagee) as it is an essential and
inseparable part of a bilateral
agreement.
 (A.M. No. 99-10-05-0, as amended,
March 1, 2001).
All applications for extrajudicial
foreclosure of mortgage, whetherunder
thedirectionoftheSherifforanotary
publicpursuanttoArt.No.3135,as
amended,andAct1508,asamended,
shallbe filedwiththeExecutive Judge,
through the Clerk of Court, who is also
the Ex-Officio Sheriff
 Clerk of Court shall:
Examineiftherequirementsarecomplied
with.(S.P.A. AUTHORIZING THE SALE)
Giveafilenumbertotheapplicationand
endorsethedateandtimeofitsfilingand
thereafterdocketthesame.
Collectionofappropriatefilingfees.
 RAFFLE
Theapplicationforextrajudicial
foreclosureshallberaffledunderthe
supervisionoftheExecutiveJudge,with
theassistanceoftheClerkofCourtand
Ex-OfficioSheriff,amongallSheriffs
includingthoseassignedtotheOfficeof
theClerkofcourtandSheriffsassignedin
thebranchesofthecourt.
Prepare the Notice
 POSTING AND PUBLICATION
1. POSTING of the notices of the sale
FOR NOT LESS THAN 20 DAYS in at least 3
publicplacesofthemunicipalityorcitywherethe
propertyissituated.
 POSTING AND PUBLICATION
2.IF THE PROPERTY IS WORTH MORE THAN
P400,suchnoticeshallalsobepublishedoncea
weekatleast3consecutiveweeksinanewspaperof
generalcirculationinthemunicipalityorcity.(Section 3).

The phrase such notice shall be published once a

week for at least three consecutive weeks does not
mean notice should be published for three full weeks.
 POSTING AND PUBLICATION
Publication is mandatory. Failureto
complywiththestatutoryrequirementsas
topublicationofnoticeofauctionsale
constitutesajurisdictionaldefectwhich
invalidates the sale or at least renter
the sale voidable.
 No Need for Publication
Forrealestatemortgagescoveringloans
notexceedingP100,000.00,exclusiveof
interestsdueandunpaid,grantedbyrural
banks or thrift banks,
Enoughthat,noticesofforeclosureare
postedforaPeriodofsixty(60)days
immediatelyprecedingthepublicauctionin
themostconspicuousareasoftheplace.
 Place of Sale
2.The sale must be made within the province
where the property or any part thereof is
located, unless otherwise stipulated (Act
No.3135 Section 2;).
In case the place has been stipulated, it
shall be made in the municipal building of the
said
 Conduct of the extrajudicial
foreclosure sale
Thebiddingshallbemadethroughsealed
bidswhichmustbesubmittedtothe
Sheriffwhoshallconductthesale
betweenthehoursof9a.m.and4p.m.of
thedateoftheauction(Act3135,Sec.4).
Anyonemaybidatthesale,unless
therearestipulationsintheagreement
 Conduct of the extrajudicial
foreclosure sale
Paymentsofthewinningbidshallbe
madeeitherincashorinmanagers
check,inPhilippinecurrency,withinfive
(5)daysfromnotice.
 Conduct of the extrajudicial
foreclosure sale
AfterthesaleClerkofCourtsshallcollect
theappropriate legal fees.

TheSherifforthenotarypublicwho
conductedthesaleshallreportthename/s
ofthebidder/stotheClerkofCourt.
 Conduct of the extrajudicial
foreclosure sale
Uponpresentationofappropriatereceipts
theClerkofCourtshallissueandsightthe
Cert. of Sale subjecttotheapprovalof
theExecutiveJudgeor,inthelatters
absence,theVice-ExecutiveJudge.
 Conduct of the extrajudicial
foreclosure sale
TheClerkofCourtshallkeepthe
completerecordsforaperiodofone(1)
yearfromthedateofregistrationofthe
certificateofsalewiththeRegisterof
Deeds,afterwhichtherecordsshallbe
archived.(Redemption Period)
PurchasersrighttoPossession
ThepurchasermaypetitiontheRTCofthe
provinceorplacewherethepropertyor
anypartthereofissituated,to give him
possession thereof during the
redemption period,furnishing bond in
anamountequivalenttotheuseofthe
propertyforaperiodoftwelvemonths.
Throughanexpartemotionorspecial
proceedings.