What is Foreclosure?

Foreclosure is the remedy available to the mortgagee by which he subjects the mortgaged property to the satisfaction of the obligation, to secure that for which the mortgage was given. It may mean the usual methods including the sale of the goods at a public auction. The right to foreclose a mortgage prescribes in ten (10) years.

What are the kinds of foreclosure?

1. ORDINARY- an ordinary execution sale is governed by the pertinent provisions of Rule 39 of the Rules of Court

2. JUDICIAL – ordinary action for foreclosure under Rule 68 of the Rules of Court.

3. EXTRAJUDICIAL- when mortgagee is given a special power of attorney to sell the mortgaged property by public auction, under Act No. 3135

What is Act No. 3135 on Extrajudicial Foreclosure of Real Property all about?

The law covers only real estate mortgages. It is intended merely to regulate the extrajudicial sale of the property mortgaged. The authority to sell is not extinguished by the death of the mortgagor/mortgagee as it is an essential and inseparable part of a bilateral agreement. No sale can be legally made outside the province in which the property sold is situated; and in case the place within said province in which the sale is to be made is the subject of stipulation, such sale shall be made in the said place in the municipality building of the municipality in which the property or part thereof is situated

What is the procedure for Extrajudicial Foreclosure of both real estate mortgage under Act No. 3135 and Chattel Mortgage under Act No. 1508?

1. Filing of application before the Executive Judge through the Clerk of Court;

2. Clerk of Court will examine whether the requirement of the law have been complied with. That is, whether the notice of sale has been posted for not less than 20 days in at least three (3) public places of the municipality or city where the property is situated, and where the same is worth more than PHP400.00, that such notice has been published once a week for at least three (3) consecutive weeks in a newspaper of general circulation in the city or municipality;

3. The certificate of sale must be approved by the Executive Judge;

4. In extrajudicial foreclosure of real mortgages in different locations covering one indebtedness, only one filing fee corresponding to such debt shall be collected;

5. The Clerk of Court shall issue certificate of payment indicating the amount of indebtedness, the filing fees collected, the mortgages sought to be foreclosed, the description of the real estates and their respective locations;

6. The notice of sale shall be published in a newspaper of general circulation pursuant to Section 1, PD No. 1079;

7. The application shall be raffled among all sheriffs;

8. After the redemption period has expired, the Clerk of Court shall archive the records;

9. No auction sale shall be held unless there are at least two (2) participating bidders, otherwise the sale shall be postponed to another date. If on the new date there shall not be at least two (2) bidders, the sale shall then proceed. The names of the bidders shall be reported to the Sheriff or the Notary Public, who conducted the sale to the Clerk of Court before the issuance of the certificate of sale.

Source: Realestatelawyer.com.ph

More Brokers Under AMLC Watch

More real estate brokers and developers are registering with the Anti-Money Laundering Council (AMLC) after being included as covered entities in the monitoring of dirty money transactions in the country.

The AMLC said close to 3,300 real estate brokers and developers registered as of end-May, representing about 11 percent of the 30,000 real estate brokers and developers registered with the Professional Regulation Commission (PRC).

The financial intelligence unit said Republic Act 11521 or the Anti-Money Laundering Act (AMLA) of 2001 has included real estate brokers and developers, as well as Philippine offshore gaming operators (POGOs) and offshore gaming operators-service providers as covered entities.

The AMLC has been conducting webinars to entice real estate brokers and developers nationwide to register with the agency.

From only 50 registrations in February, the agency said a total of 1,526 real estate brokers and developers registered in March followed by more than 1,100 in April and 500 in May.

The AMLC said hundreds of applications from real estate brokers and developers are still pending and awaiting submission of relevant documents.

“The volume of registrations is also challenged by the limited manpower of the AMLC’s compliance and supervision group which handles registrations,” it said.

The group handles the registration of thousands of designated non-financial businesses and professions. Aside from real estate brokers and developers, lawyers, accountants, jewelry dealers and casinos are required to register with the AMLC.

Failure to register with the reporting system of the AMLC may result in penalties ranging from P10,000 to a maximum of P5 million, depending on asset size.

Under the revised AMLA, real estate brokers and developers are mandated to report single cash transactions worth P7.5 million and above to the AMLC.

This came after Paris-based Financial Action Task Force (FATF) said dirty money proceeds are being funneled into the real estate sector in several countries in Asia-Pacific, including the Philippines.

The AMLC said the country’s real estate sector has a medium-high vulnerability to dirty money transactions due to limited anti-money laundering regulation.

Source: Philstar

Interest rates to stay low until recovery is firmly underway

The Philippines will remain awash in cheap cash to help encourage growth until the central bank sees clear signs that the economy’s recovery from its deepest postwar slump is well underway, according to the head of the agency.

In an online briefing, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno also sought to reassure markets that any monetary policy tightening by the US Federal Reserves—the world’s most influential central bank—could be withstood by the local financial system.

“In the Philippines, monetary policy should remain supportive until recovery is firmly underway,” he said.

The BSP chief added that the timing, as well as the conditions under which the regulator would start unwinding some P2.2 trillion worth of monetary stimulus rolled out during the pandemic, would continue to be guided by the domestic inflation and growth outlook over the medium term.

With signs of broad improvement in economic performance and a relatively more manageable pandemic situation in some economies, markets expect central banks, including the US Fed, to consider a possible shift to policy normalization.

“Amid this, the BSP’s monetary policy response and timing of implementation will continue to be guided by our inflation and growth outlook over the policy horizon and the risks surrounding such outlook, including developments on the external front and domestic demand conditions,” Diokno said.

“Such data-dependence in policy-making will allow the BSP to avoid the premature withdrawal of policy stimulus,” he added.

Inflation is projected to be within-target over the policy horizon as recent price pressures from transitory supply factors were mitigated by nonmonetary measures as well as downward pressure from the current economic slack.

“We continue to have ample external liquidity buffer to withstand adverse external shocks, including the possibility of an earlier than anticipated US policy rate hike. Continued progress with vaccination and health measures alongside fiscal policy support also underpin our projection of favorable economic growth prospects once we enter the post-pandemic phase,” said the Governor.

Moving forward, he said the BSP would remain vigilant against emerging risks to the outlook for inflation and growth, including the possible spillover effects from external developments.

Diokno added that the BSP was ready to adjust its monetary policy settings as necessary to ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth was achieved.