Fire Closure Of Mortgage Flashcards
What is foreclosure of mortgage?
Foreclosure is the remedy available to the mortgagee by which he subjects the mortgaged property to the satisfaction of the obligation to secure which the mortgage was given.
● It the process by which the property will be sold at a public auction/sale and the proceeds are used to pay the obligation.
What are the kinds of foreclosure?
○ Judicial
○ Extrajudicial
What is the duty of the Court after trial?
After trial, if the court shall find the facts to be true, it ‘ shall ascertain the amount due the plaintiff and render judgment for the sum with an order for it to be paid by adverse party to the court or judgment oblige within a period of not less than 90 days nor more than 120 days from entry of judgment, and that in default, the property shall be sold at public auction.
This period is known as Mortgagor’s Equity of Redemption.
Effect if there is No Payment
● Upon motion, the court shall order the property sold in the manner prescribed
under Rule 39, such SALE shall not affect the rights of persons holding prior liens/encumbrances on the property or parts thereof.
● Upon motion, sale shall be CONFIRMED, and such 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.
Effect if there is No Payment
Upon finality of the order of confirmation or upon expiration of the period of redemption when allowed by law, the purchaser at auction is entitled to possession unless a third party is holding it
adversely to the judgment obligor, in which case, the purchaser at the auction sale may secure a writ of possession from the Court ordering the sale.
Requisites for Extrajudicial foreclosure
A mortgage may be foreclosed extrajudicially where there is inserted in the contract a clause giving the mortgagee the power upon default of the debtor, to foreclose the mortgage by an extrajudicial sale of the mortgaged property.
Requisites for Extrajudicial foreclosure
A mortgage may be foreclosed extrajudicially where there is inserted in the contract a clause giving the mortgagee the power upon default of the debtor, to foreclose the mortgage by an extrajudicial sale of the mortgaged property.
The process of extrajudicial foreclosure:
The application for extrajudicial foreclosure of mortgage shall be filed with the
Executive Judge through the Clerk of Court (who is also the Ex-Officio Sheriff). After
receipt of the application, the Clerk of Court shall, among other duties:
(a) examine the same to ensure that the special power of attorney authorizing the
extrajudicial foreclosure of the real property is either inserted into or attached to the
deed of real estate mortgage;
(b) raffle the application among the Sheriffs and
(c) cause the posting and/or publication of the notice of sale. This likewise applies to
applications that involve the conduct of a foreclosure sale under the direction of a
Notary Public, as he is an officer of the Court and is legally subject to its supervision.
2. If a sale is not restrained or enjoined, and is subsequently conducted, the same must be:
(a) made in the province where the property to be sold is situated. Sale outside the province is illegal; (b) In case the mortgage deed specified a place in a municipality in the province where the sale would be made, such sale shall be made in such place or (c) if the place of sale in the municipality was not stipulated, in the municipal building of the municipality in which the property or part thereof is situated.
- As a rule, notices of sale shall be posted for not less than 20 days in at least 3 public places in the city or municipality where the property is situated. ‘
- The extrajudicial foreclosure sale be conducted by public auction or bidding made through sealed bids which must be submitted to the Sheriff who shall conduct the sale between the hours of 9:00 a.m. and 4:00 p.m. of the date of the auction. The property mortgaged shall be awarded to the party submitting the highest bid.
- The sheriff shall then sign and issue the certificate of sale.
What is redemption?
right of the mortgagor in case of extrajudicial foreclosure to redeem the mortgaged property within a certain period after it was sold for the satisfaction of the mortgage debt. Usually, a redemption period of 1 year is given to the debtor to redeem the property.
