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Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as the collateral for the loan. In Mandaue City, as other parts of the Philippines, foreclosure laws are outlined under the Republic Act No. 3135, otherwise known as the “Act regulating the sale of property under special powers inserted in or annexed to real-estate mortgages.”
Foreclosure disputes can often be complex, stressful, and difficult to navigate alone. It is advisable to seek legal advice if you are facing a foreclosure situation, whether you're the borrower trying to keep your property, or a lender initiating a foreclosure. A lawyer is also helpful in negotiating with the lending institution to modify the loan, settle the balance, or restructure payment schemas. Additionally, any violations, illegal activities, or procedural mishaps in the foreclosure process can be detected and addressed by a foreclosure lawyer.
In Mandaue City, local laws follow the national housing and mortgage guidelines. A mortgage is foreclosed either judicially (through the courts) or extra-judicially (outside the court by a public auction). Judicial foreclosure involves filing a lawsuit to obtain a court order, a process that tends to be slower but allows the debtor to contest the foreclosure. The quicker avenue, extra-judicial foreclosure, is possible when a “power of sale” clause exists in a mortgage. A public auction is then held, and the property is sold to the highest bidder.
Extra-judicial foreclosure happens when the mortgaged property is sold through a public auction by a notary public, without resorting to court action. This can happen if a "power of sale" clause is included in the mortgage agreement.
Yes, under Philippine law, the borrower, or any other party with an interest in the property, has one year from the foreclosure sale date to redeem the property.
In a foreclosure sale, the property is offered to the public. Any person offering to pay the highest price wins the property. However, the bid must not be less than the total claim of the mortgagee including the principal, interest, and other costs.
Yes, a foreclosure can be stopped if the borrower settles the full amount before the public auction. A lawyer can help in negotiating new terms with the lender. Any irregularities or misconduct during the foreclosure process can also be contested.
If there are no bids higher than the opening bid, the property is awarded to the bank. If there is a higher bid, that highest bidder gets the title of the property after completing the payment.
The Philippines’ Housing and Urban Development Coordinating Council (HUDCC), the Department of Justice (DOJ), and the Public Attorney’s Office (PAO) provides resources and support for those facing foreclosure. Additionally, the Integrated Bar of the Philippines (IBP) offers pro bono legal aid and consultancy for foreclosure cases.
If you are in need of legal advice regarding foreclosure in Mandaue City, it’s recommended that you contact a local lawyer who is skilled in property law and foreclosure regulations. They can explain your legal options and help you navigate through this complex process, while protecting your best interests. Additionally, reaching out to the local government or non-profit organizations may offer you supplementary support or services.
