Procedure of Extrajudicial Foreclosure As Prescribed in Administrative Matter No
Procedure of Extrajudicial Foreclosure As Prescribed in Administrative Matter No
99-10-05-0:
1. Filing of application for extrajudicial foreclosure with the Executive Judge through
the Clerk of Court who is the ex- officio sheriff.
2. Upon receipt of application, it shall be the duty of the Clerk of Court to:
b. Collect the filing fees and issue the corresponding official receipt
d. Sign and issue the certificate of sale, subject to the approval of the
executive judge, or in his absence, the vice-executive judge. No certificate
shall be issued in favor of the highest bidder until all fees provided have
been paid provided that it shall not exceed P1000.
e. e. After the certificate of sale has been issued, keep the complete records
while awaiting any redemption within a period of 1 year from date of
registration of the certificate of foreclosure sale, which in no case shall be
more than three months after foreclosure whichever is earlier.
3. Notices of auction sale for extrajudicial foreclosure for publication by the sheriff or
the notary public shall be published in a newspaper of general circulation.
4. The Executive Judge, with the assistance of the Clerk of Court, raffle applications
for extrajudicial foreclosure of mortgage under the direction of the sheriff among
all sheriffs, including those assigned to the Office of the Clerk of Court and
Sheriffs IV assigned in the branches.
5. The name/s of the bidder/s shall be reported by the sheriff or notary public who
conducted the sale to the Clerk of Court before the issuance of the Certificate of
Sale.
Mortgagee must account for the proceeds as if the price were paid in cash, and in an
action against the mortgagee to recover the surplus, the latter cannot raise the defense
that no actual cash was received.
With surplus- belong to the mortgagor or his assigns. When there are junior
encumbrances, or when there are several liens it must be applied to their discharge in
the order of their priority
Redemption of the property sold- 1 year from and after the date of the sale.
Reckoning date is from the registration of the certificate of sale since it is the only from
the date that the sale takes effect as a conveyance if the redemptioner is a natural
person. If juridical persons, they have right to redeem until but not after registration of
the certificate of foreclosure sale which in no case shall be more than three months after
foreclosure whichever is earlier.
Remedy of party aggrieved by the foreclosure- petition that the sale be set aside and
the writ of possession be cancelled because the mortgage was not violated or the sale
was not made in accordance with the provisions.
3. Price was inadequate and the inadequacy was so great as to shock the
conscience of the court
Contents of complaint:
a. Date and execution of mortgage;
b. Assignments of mortgage, if any;
c. Names and residences of the mortgagor and mortgagee;
d. Description of the mortgaged property;
e. Statement of the date of the evidence of obligation secured by mortgage- the
amount claimed to be unpaid thereon;
f. Names and residences of all persons having interest in the property whom
shall be made defendants.
2. Trial. If facts set forth in the complaint are found to be true, the court shall
ascertain the amount due, including interest and other charges. (Sec. 2, Rule 68,
ROC)
3. Judgment. The court shall render judgment against defendant for the sum found
due and order its payment to judgment obligee within a period not less than 90
days but not more than 120 days from the entry of judgment. (Sec. 2, Rule 68,
ROC)
If the mortgagor fails to pay at the time directed in the order , the court, upon
motion, shall order the property to be sold to the highest bidder at public auction.
Court may require such purchaser to pay unto the court the amount
of whatever loss, with costs, occasioned by his refusal to pay. Court
may punish him for contempt if he disobeys the order.
c. Adjournment of sale
Officer may adjourn the sale to any date and time agreed upon by
parties, if with written consent.
Officer may adjourn the sale from day to day if it becomes necessary
to do so for lack of time to complete the sale on the day fixed in the
notice or the day to which it was adjourned. (Sec. 22, Rule 39, ROC)
- Buyer has the right to take possession of the property upon petition
to court.
e. Redemption
5. Confirmation of sale
The sale when confirmed by an order of the court, also upon motion, shall
operate to divest the rights of all parties to the action and to vest their
rights in the purchaser subject to such right of redemption as may be
allowed by law.
6. Execution of judgment
The balance if any, shall be paid to the mortgagor or his duly authorized
agent, or to the person entitled to it.
The foreclosure will only be complete with the issuance of the sheriff’s
certificate acknowledged and recorded. The absence of a certificate of sale
will not transfer the title to the vendee. Only the foreclosure proceedings are
completed and the mortgaged property sold to the purchaser that all interest
of the mortgagor are cut off from the property.