I mortgaged my land but unfortunately, I wasn’t able to pay my loan on time. The mortgage was judicially foreclosed and scheduled to be sold at public auction. What happens when my land is sold? Will my TCT be automatically cancelled?
A contract of mortgage constituted over an immovable directly and immediately subjects the said property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation which it secures (Article 2126, Civil Code of the Philippines). The failure of the mortgagor to pay his loan shall give the mortgagee the right to foreclose the mortgage and to have the property sold in a public auction to satisfy your obligation (Article 2087, id.). In case the property is sold, its proceeds shall, after deducting the costs of the sale, be paid to the person foreclosing the mortgage. If there shall be any balance or residue after paying off the mortgage debt due, the same shall be paid to junior encumbrances, if there be any, or to the mortgagor or his duly authorized agent, or to the person entitled to it (Section 4, Rule 69, Rules of Court).
Upon the foreclosure of mortgage and the consummation of the auction sale, the title of the land subject of the mortgage shall be cancelled and a new certificate of title shall be issued in the name of the purchaser only if there is no right of redemption. However, if the mortgagor has a right of redemption, his certificate of title shall not be cancelled but the certificate of sale and the order confirming the sale shall be registered with a brief memorandum thereof made by the Register of Deeds upon his certificate of title. If the mortgagor will be able to redeem his property, the certificate or deed of redemption shall be filed with the Register of Deeds on the certificate of title of the mortgagor. If the property is not redeemed, the final deed of sale executed by the sheriff in favor of the purchaser at a foreclosure sale shall be registered with the Register of Deeds. The title of the mortgagor shall be cancelled and a new certificate shall be issued in the name of the purchaser (Section 63, Presidential Decree [PD] 1529).
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