JUDICIAL

FORECLOSU
RE
Ajudicial
foreclosureoccurs when
a court allows alenderto
seize and sell a
borrower'scollateralwhen
the borrower has failed to
repay thelender.
Thetermis most often
associated withreal estate.
JUDICIAL FORECLOSURE UNDER RULE
68,

RULES of
COURT
JUDICIAL FORECLOSURE UNDER RULE 68, RULES OF
COURT
I. The mortgagee should file a petition for judicial foreclosure in the
court which has jurisdiction over the area where the property is
situated
II. The court will conduct a trial.
If, after trial, the court finds merit in the petition, it will render
judgment ordering the mortgagor/debtor to pay the obligation
within a period not less than 90 nor more than 120 days from
the finality of judgment.
III. Within this 90 to 120 day period, the mortgagor has the chance to
pay the obligation to prevent his property from being sold.
This is called the EQUITY OF REDEMPTION PERIOD.
IV. If mortgagor fails to pay within the 90-120 days given to him by
the court, the property shall be sold to the highest bidder at
public auction to satisfy the judgment.
V. There will be a judicial confirmation of the sale.
After the confirmation of the sale, the purchaser shall be
entitled to the possession of the property, and all the rights of
the mortgagor with
respect to the property are severed or terminated.
The equity of redemption period actually extends until the
sale is confirmed.
Even after the lapse of the 90 to 120 day period, the
mortgagor can still redeem the property, so long as there has
been no confirmation of the sale yet.
Therefore, the equity of redemption can be considered as the
right of the mortgagor to redeem the property BEFORE the
confirmation of the sale.

Notwithstanding Act 3135, juridical persons whose property is

being sold pursuant to an extrajudicial foreclosure, shall have the
right to redeem the property in accordance with this provision until,
but not after, the registration of the certificate of foreclosure sale
with the applicable Register of Deeds which in no case shall be more
than three (3) months after foreclosure, whichever is earlier.

Owners of property that has been sold in a foreclosure sale

prior to the effectivity of this Act shall retain their redemption
rights until their expiration.
 The equity of redemption period actually extends until the
sale is confirmed.
VI. After the confirmation of the sale, the mortgagor does not have a
right to redeem the property anymore.

This is the general rule in judicial foreclosures there is no

right of redemption after the sale is confirmed.

VII. The proceeds of the sale of the property will be disposed as

follows:
A. First, the costs of the sale will be deducted from the price at
which the property was sold
B. The amount of the principal obligation and interest will be
deducted
C. The junior encumbrances will be satisfied
D. If there is still an excess, the excess will go back to the
mortgagor.
In mortgage, the mortgagee DOES NOT get the excess
(unlike in pledge).
E. If there is a deficiency, the mortgagee can ask for a
DEFICIENCY JUDGMENT which can be imposed on other
property of the mortgagor.
The equity of redemption period actually extends until the
sale is confirmed.

VIII.Forjudicialforeclosure,the redemption period is within one

year.

The purposeis to give concession to thebanks.

Withjudicial foreclosurewhereintheredemption priceis the
originalprice.Inthiscase, you have to pay more when
redeeming froma bank.