Supreme Court Issues New Rules On Extra-Judicial Foreclosure Of Mortgage
The Philippine Supreme Court recently issued the Rules of Procedure on Extra-Judicial Foreclosure of Mortgage (A.M. 99-10-05-0 dated August 7, 2001) amending and modifying Adm. Order No. 3 (19 October 1984) and Adm. Circular No. 3-98 (5 February 1998).
The new rules clarified that the period for corporations to redeem their foreclosed properties shall lapse upon the registration of the certificate of foreclosure sale or after three (3) months after the foreclosure whichever occurs earlier. This provision has serious implications on various Philippine corporations that have defaulted on their loans and whose assets have been foreclosed. The limited period will very likely prevent corporations from redeeming their foreclosed assets from bank-creditors, especially considering the poor economic climate. Note, however, that for individuals, the period of redemption is still one year after the registration of the foreclosure sale.