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The redemption period after the foreclosure of real estate mortgage by a bank

What is a Redemption Period?


The time duration offered to borrowers, during or even after a foreclosure in some cases, to return the borrowed money - pay off the debt owed to the bank, and reclaim their assets, is called the Redemption Period in Real Estate Foreclosures.


How long is the so called "redemption period"?


The "redemption period" given to you by law in order to redeem your property is one (1) year from the registration of the foreclosure sale. To elucidate this point, pay attention to the provisions of Republic Act Number 8791, otherwise known as the "General Banking Law of 2000." Succinctly, Section 47 of the aforementioned law reads:


"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."


The foregoing dictates that in case of foreclosure by a bank, whether the same be judicial or extrajudicial, the mortgagor has a period of one (1) year from the sale of the real estate to redeem the property.


Thus kindly take note of the date of the registration of sale, which shall serve as the reckoning point of the one (1) year redemption period.


Also, in so far as the redemption amount is concerned, it must also be noted that the same not only includes the amount stated in the mortgage deed but also the interests at the rate specified in the mortgage, and all the costs, and expenses incurred by the bank from the sale and custody of said property less the income, if any, derived therefrom.


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