Redemption of Foreclosed REM
Definition of Terms
Right of Redemption - a prerogative to re-acquire mortgaged property after
registration of the foreclosure
sale.
Equity of Redemption -right of the mortgagor to extinguish the mortgage and
retain ownership of the
property by paying the secured debt within the 90-day period
after the judgment becomes final, in accordance with Rule 68,
or even after the foreclosure sale, but prior to its confirmation.
Redemption
Judicial Foreclosure (Rules of Court)
No right of redemption exists. If the foreclosure sale is confirmed by the court,
it 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.
The exception emphasized above pertained to the right of redemption, only
when the mortgagor is PNB (through its charter), or a bank or banking
institution (thru the General Banking Act). The right must be exercised within 1
year, counted from the date of registration of the certificate of sale in the
Registry of Property.
There exist also, the so-called Equity of Redemption or the right of the
mortgagor to extinguish the mortgage and retain ownership of the property by
paying the secured debt within the 90-day period after the judgment
becomes final, in accordance with Rule 68, or even after the foreclosure sale
but prior to its confirmation.
Thus, after order of confirmation, and the mortgagor is not the PNB, bank or
banking institution, no redemption can be effected any longer.
Extra-judicial Foreclosure (Act No. 3135)
There always exists the Right of Redemption which is within one (1) year after
the foreclosure sale.
There is a different rule, however, if the mortgagee is a bank, quasi-bank,
or trust entity and the mortgagor is a juridical person, the redemption
period is until the registration of the certificate of foreclosure sale or until 3
months after the foreclosure, whichever is earlier.
There is no Equity of Redemption in Extra-Judicial Foreclosure.
