This is the second installment of listings of foreclosed properties which I am posting for the benefit of those who were unable to attend the 4th Housing Fair which was held recently at SM Megamall and also for those who attended but were unable to get a copy. This installment features foreclosed properties from the Bangko Sentral ng Pilipinas (BSP) that are for sale as of November 30, 2009 along with Frequently Asked Questions (FAQ) about BSP acquired assets.

The BSP foreclosed properties for sale are from the following areas:

• Luzon
• Bataan
• Batangas
• Bulacan
• Cavite
• Isabela
• Laguna
• La Union
• Nueva Ecija
• Oriental Mindoro
• Palawan
• Pampanga
• Pangasinan
• Quezon Province
• Rizal Province

Please refer to the complete listing below which includes property details like location, TCT/CCT No., Area (sq.m.), description, and selling price.

Click here to download the complete listing for BSP foreclosed properties for sale as of November 30, 2009.

I got this listing from BSP’s booth at the 2009 Housing Fair. I have already checked their website and it appears that as I write this article, the list above is more updated than their online list which was last updated on July 31, 2009 .

Complete descriptions of the properties are available at the Asset Management Department, Rm. 313, Five-Storey Building, BSP Complex, A. Mabini St., Malate Manila or you may call the following numbers:

• Direct Lines: 523.3420; 523.3486; 524.9829; 525.0614

The “fine print”
The sale of the properties shall be “As is, Where is” and the awardee as may be approved by the Committee on Disposal of Real Properties or the Monetary Board shall undertake the responsibility to acquire and maintain peaceful possession and enjoyment of the property at his expense. Prices are subject to change without prior notice.

FAQ on BSP acquired assets

While I was checking BSP’s website, I stumbled on this FAQ which gives information about BSP’s foreclosed assets,  how to buy them, requirements, and a lot more. Please refer to their Frequently Asked Questions (FAQ) on acquired assets below.

1. How did the Bangko Sentral ng Pilipinas (BSP) obtain its acquired assets?

When availing of the loan facilities of the Bangko Sentral ng Pilipinas (BSP), private banks assign to BSP their receivables including the collaterals. Upon failure of these banks or their borrowers to pay their loans, the BSP forecloses these real properties. Another mode by which the BSP acquires these assets is when the banks pay their loans with properties under a dacion en pago agreement.

2. What is a foreclosure sale?

A foreclosure sale is a public bidding of loan collaterals. If the creditor is the highest bidder for the property, the supposed proceeds of the sale are applied as payment for the loan. Thus, the creditor extinguishes the loan of the debtor but in turn gets a real property, which is the collateral for the loan.

3. Can an owner of a property subject to foreclosure sale reacquire his property?

The law allows the registered individual owner or mortgagor to redeem the property subject to foreclosure sale within one year after the sale of the real estate. The reckoning date of the one-year period is the date of the registration on the certificate of foreclosure sale with the Register of Deeds. A juridical person, whose property is being sold pursuant to an extrajudicial foreclosure, shall also have the right to redeem the property before the registration of the certificate of foreclosure sale with the Register of Deeds but not more than three months after foreclosure, whichever is earlier.

4. How much is the redemption price?

The redemption price is computed based on the amount due, plus the interest rate specified, on the mortgage deed as well as all the costs and expenses incurred by the BSP due to foreclosure and custody of the property. However, as assistance to the borrower-mortgagee, the BSP allows a revision in interest rate and penalty rate, that is, the rate specified in the mortgage document or 12 percent and five percent per annum, respectively, whichever is lower, computed from the time of assignment of the borrower bank to the BSP, until the date of payment.

5. Can the redemption period be extended?

The BSP allows the extension of the redemption period up to a maximum period of five years subject to interest at 12 percent per annum until full payment. Any proposal for a longer redemption period of up to ten years shall be subject to the approval of the Monetary Board.

6. If the previous owner fails to exercise his right of redemption, what happens to the title of the property?

The BSP shall implement the transfer of the title from the previous owner to the BSP.

7. If the title is already in the name of BSP, can the previous owner still re-acquire his property?

The BSP being a government institution is required, as an initial mode of disposition, to sell through public auction, all acquired properties already in its name. The previous owner may, thus, participate in the auction or negotiate for the purchase of the property in case there is failure of bidding.

8. Does the previous owner have the first priority to purchase the property in the public auction?

As the public auction is open to all interested buyers, no priority is given to the previous owner.

9. When is the public auction held?

The auction is usually scheduled once every quarter. An Invitation to Bid (ITB) is published in a newspaper of general circulation no later than 15 days before the auction date. The ITB states when and where the auction will take place, shows the list of properties for sale and the minimum bid price for each property.

10. Who conducts the public auction?

The Committee on Disposal of Real Properties conducts the public auction. This is composed of:

Chairman – BSP Managing Director, Regional Monetary Affairs Sub-Sector
Co-Chairman – BSP Deputy General Counsel
Members – Heads of five different departments in the BSP

11. What is the basis of the selling price of acquired assets?

One of the values considered in determining the selling price of a BSP acquired asset is its latest appraised value.

12. Is a fee charged when one participates in the auction?

The complete description of the properties, rules and regulations on the bidding procedures and the prescribed bid forms are available for a minimal fee of P50.00. The bid form can be obtained from the Asset Management Department (AMD), Rm. 313, of the BSP’s Five-Storey Bldg. The deadline for submission of duly accomplished bid forms is published in a local or national daily. Bids should be enclosed in sealed envelopes. All bids are opened immediately after the deadline for submission.

13. Does a bidder need to be present during the public auction?

A bidder may or may not attend the public auction. He may send a representative to observe. However the presence of interested parties is highly encouraged so decisions can be made on any issues that may be raised during the auction.

14. What are the terms and conditions of the auction sale?

The auction will be conducted on a cash basis and shall be under a sealed envelope system. The basic terms and conditions of the auction sale are:

• Any qualified bidder shall accomplish a Bid Tender Form, clearly indicating the following, among others:

a. description of the items or lots with the corresponding bid offer clearly indicated in figures and words;
b. name and signature of bidder;
c. business or residence address of the bidder;
d. business license number, any government-issued ID number; or Tax Identification Number (TIN) of the bidder; and
e. terms and conditions offered regarding bidders bond, payment, default and delivery.

• The bidder shall accomplish the Bid Tender Form, in duplicate, preferably typewritten. Erasures or interlineations should be avoided and if unavoidable should be duly initialed by the bidder.
• The Bid Tender Form shall be sealed in an envelope with the TCT/CCT Number and location of the property written on the face of the envelope.
• The envelope shall contain only one bid corresponding to each property. It shall also contain all bid documents issued by the Asset Management Department (i.e., Bid Tender Form and Instruction to Bidders and Terms and Conditions of the Bidding), the Bid Bond, and other attachments, as may be required.
• All documents shall bear the bidder’s signature on each and every page. The signature of the bidder on the original Bid Tender Form and other bid documents constitutes acceptance of, and assent to, all conditions embodied therein.
• The envelope shall be deposited in the designated box on or before the opening of bids.

15. How much is the required bid bond?

The bid bond required from bidders is equivalent to at least 10 percent of the bid price, and shall be made in the form of cash, manager’s or cashier’s check payable to the Bangko Sentral ng Pilipinas.

16. Can a buyer bid less than the minimum bid price?

No. The bid should be equal to or more than the minimum bid price.

17. When does the highest complying bidder pay the balance of his bid?

The highest complying bidder, whose bid has been approved, shall pay the balance of his bid within 15 calendar days from receipt of the Notice of Award.

18. What is a failed bidding?

A bidding may be declared a failure in any of the following cases:

• There is no bidder; or
• All bidders failed to comply with the terms and conditions prescribed in the ITB.

19. What happens if there is failed bidding?

In the event of a failed bidding, the Committee will immediately start accepting offers for negotiation and continue to accept offers through the Asset Management Department. However, the Committee may at its discretion, elect to immediately conclude the negotiation after a failure of bidding whenever there is a highest complying offeror ascertained.

20. What happens if two or more bidders submitted the same bid amount?

When two or more complying bidders make identical offers constituting the highest bids, a public auction viva voce between those who submitted identical bids shall be resorted to at a price not lower than the highest offered bid.

21. What documents are required to negotiate purchase of a property?

The offeror shall accomplish and submit the following forms to the Asset Management Department:

• Negotiated Offer to Purchase form, in two copies;
• Negotiated Sale Rules and Procedures, in two copies, signed on all pages;
• Information Sheet;
• If the offeror is a representative of an individual, corporation, partnership or any form of entity, a written authority to represent the individual or Secretary’s Certificate for juridical entities; and
• The following documentary requirements as listed in the information sheet:

a. Individual:

• Proof of Income
• Employer’s Certificate
• Proof of Bank Accounts
• “2 x 2” ID Picture
• Photocopy of any government-issued ID
• Certification of good moral character and no pending case for government employees with permanent appointments buying a property falling under the socialized housing category, set by the Housing and Urban Development Coordinating Council (HUDCC)

b. Corporation:

• Securities and Exchange Commission (SEC) Registration, Articles of Incorporation, Business Permit
• Audited Financial Statements for the last two years
• Board Resolution authorizing the purchase and designated signatories and Secretary’s Certificate

22. How much deposit is required?

• For cash purchases, a deposit equivalent to at least ten percent of the offer price must be made upon submission of offer.
• For purchases on installment, a deposit of at least ten percent of the offer price is also required, five percent of which, however, must be made upon submission of the offer to purchase, and the additional five percent to be remitted within 15 calendar days from date of receipt of Notice of Approval.
• For purchases by government employees with permanent appointments of properties qualified under the socialized housing category, a minimum deposit of P5,000.00 is required.
• The deposit may be in the form of cash or manager’s/cashier’s check payable to the Bangko Sentral ng Pilipinas.

23. Does the deposit form part of the purchase price?

If the offer is approved, the deposit forms part of the purchase price.

24. What are the terms of payment?

• For cash purchases, the balance of the offer price (net of at least ten percent deposit) must be remitted within 30 calendar days from date of receipt of Notice of Approval.
• For purchases on installment basis, the balance of the down payment, if any, shall be completed within 15 calendar days from receipt of Notice of Approval. The balance of the offer price (net of at least ten percent down payment) shall be paid within a maximum period of 180 months or 15 years. However, for properties with a selling price of P400,000.00 and below classified as residential or agricultural, which fall under the socialized housing category, the maximum payment period is 25 years.
• Balance of the purchase price shall be subject to an interest rate fixed over the period as determined by the Committee. Properties classified as socialized housing shall be charged interest based on the rate defined by the Housing and Urban Development Coordinating Council as implemented by Pag-IBIG Fund.
• Payments may be made on a monthly, quarterly, or annual basis. The first amortization is due 30 days after receipt of Notice of Approval; and
• Payments may be made through availment of PAG-IBIG housing loan or bank loan subject to the condition that the Deed of Absolute Sale shall be executed and the title may be released, only upon receipt by the BSP of the documents evidencing payment guarantee issued by PAG-IBIG fund or the lender-bank;
• Offers payable within 90 days from receipt of the Notice of Approval are not subject to interest charges.

25. If a buyer offers to purchase a property at the BSP minimum selling price and submits all the required documents, is he guaranteed that the sale will be awarded to him?

No. The Guidelines on Sale of Acquired Assets require a 15-day waiting period within which to accept other offers which may be in the best interest of the BSP. The waiting period is reckoned from the time the first Negotiated Offer to Purchase Form is received by AMD and payment of the required down payment. However, this policy does not apply for negotiation offers accepted/approved by the Committee immediately after failure of auction.

26. After the 15-day waiting period, is the offer automatically approved?

No. All the offers received are evaluated by AMD after the 15-day waiting period and submitted to the Committee for decision. The Committee meets only once a month – usually every third Wednesday of the month. For properties valued at over P 20.0 million, the Committee will submit the offers to the Monetary Board for decision.

27. How will the proposed buyer know that his offer is accepted?

The Committee sends a Notice of Approval for accepted proposals.

28. What happens to the deposit for offers not accepted?

Deposits of prospective buyers whose offers are not accepted shall be returned without interest by crediting their bank account, as stated in the Negotiated Offer to Purchase Form, under the Electronic Peso Clearing and Settlement System.

29. What happens if the buyer fails to pay the balance of the required down payment within the prescribed period?

If the buyer, whose offer was approved by the Committee or the Monetary Board, fails to pay in full the required down payment within the prescribed period, the BSP will cancel the award and forfeit 50 percent of the deposit already made.

30. Can a buyer withdraw his offer to purchase after it has been approved and accepted by the BSP?

Withdrawal, for any cause whatsoever, of the offer to purchase approved by the BSP, within 30 days from receipt of the Notice of Approval or failure to comply with the conditions of the sale, shall mean forfeiture in favor of the BSP of 50 percent of the deposit made and cancellation of the Notice of Approval.

31. If there are two or more offers for the same property, to whom is the sale awarded?

Where there are two or more offers for the same property, the best offer shall be determined in accordance with the following order of priorities:

• First priority shall be given to offers payable in spot cash within 30 calendar days upon receipt of the Notice of Approval.
• Second priority shall be given to offers payable in 12 months or less; and
• Third priority shall be given to offers payable on installment over 12 months or up to 180 months.

The primary consideration, within the same priority, shall always be the highest offer price. Where the difference in the amount of the offers in the same priority is 5 percent or less, the offerors will be asked to resubmit on a designated date and time, improved offers in sealed envelopes to the designated officials of the AMD. In case the same offer price is received, the next consideration shall be the highest down payment. Finally in case the offers received have the same offer price and the same down payment, the shortest payment period will be accepted.

However, when there are two or more offers received, and one is a government agency or instrumentality, with the same offer prices, terms, and proposed down payment, preference shall be given to the government agency or instrumentality. However, where there are two or more government agencies or instrumentalities interested in the same property with the same offer prices, terms and proposed down payment, bidding shall be conducted by the Committee on Disposal of Real Properties to be participated only by such government agencies or instrumentalities.

32. What contract covers the sale transaction?

A Contract to Sell (CTS) is executed upon receipt of the required deposit/down payment. If the buyer fails to submit the signed CTS within three months or 90 days from receipt of the Notice of Approval, the BSP will cancel the award and forfeit the down payment. Upon receipt of the full payment of the purchase price, a Deed of Absolute Sale is executed.

33. Can a buyer pay the deposit and monthly amortizations at the BSP Regional Offices?

Payments may be made at the BSP Main Office or at any of the BSP Regional Offices or Branches nationwide. The Committee, however, encourages buyers to issue postdated checks.

34. Does BSP give a discount?

Discounts are granted on a case-to-case basis and depending on the condition of the property.

35. If a buyer purchases on wholesale, can they get a discount?

Yes, a buyer may avail of graduated rates of discount if he purchases on a wholesale basis.

36. What is considered as a wholesale purchase?

Offers to purchase may be considered as a wholesale transaction under any of the following circumstances:

• Total area of the property or group of properties is at least five hectares;
• At least five properties are purchased at the same time, regardless of the offer price or area; or
• The offer price for the property or group of properties is at least P50.0 million.

37. Can a buyer shorten his payment period or prepay the principal without being penalized?

The BSP allows prepayments without charging penalties.

38. Can a buyer who has lost his Filipino citizenship still acquire BSP properties?

Yes, provided he complies with the limits set by law on land acquisition and issues a sworn statement to that effect.

39. If there are unauthorized occupants of the property, who is responsible for their eviction?

The sale of the properties is on an “As is, Where is” basis and the buyer shall undertake the responsibility to acquire and maintain peaceful possession and enjoyment of the property without seeking the assistance of the BSP.

40. Can the buyer assign his rights and obligations under the Contract to Sell?

Yes, the buyer can assign his rights over the purchase of a property but with the prior written consent of the BSP.

41. Who shoulders the taxes and fees for the transfer of title to the name of the buyer?

The payment of the tax due the Bureau of Internal Revenue is subject to agreement between BSP and the buyer. If the BSP shoulders the tax, this shall only be up to 6 percent of the selling price. In case the zonal value or market valueper tax declaration is higher than the selling price, any tax due on the difference between the selling price and the zonal value/market value shall be for the account of the buyer. The buyer shall, however, pay for all applicable local taxes, fees and assessments, such as documentary stamp tax, transfer taxes, registration fees, and all other expenses incidental to the sale. Real estate taxes and insurance premiums shall be for the account of the buyer accruing from the date of receipt of the Notice of Approval and full settlement of the down payment.

42. Does BSP allow the sale of properties through a broker?

Yes, the BSP allows the sale of properties through brokers who are accredited with the BSP through the Asset Management Department, and who have been issued an authority to sell on a non-exclusive basis. However, brokers cannot represent a client in a public auction.

43. If a buyer agrees to assume the payment of capital gains tax or creditable withholding tax, can he remit the tax due directly to the Bureau of Internal Revenue (BIR)?

No. The buyer should remit to the BSP the amount of tax due and the BSP in turn, would pay the BIR through a credit transfer to the account of the Treasurer of the Philippines. The credit advice covering the payment and the pertinent BIR form shall be presented by the buyer to the concerned Revenue Regional Office. A copy of the documents, duly stamped received by the BIR, should be returned by the buyer to the BSP.

44. Can a broker represent a proposed buyer who initially negotiated with BSP?

No. If a prospective buyer initially negotiated with BSP, he can no longer be represented by a broker later in the negotiation.

45. Can a buyer who was assisted by a broker in the purchase of a property from the BSP be assisted by the same or any other broker in the purchase of another unit or property located in the same condominium building complex, row house or subdivision regardless of phase?

No. A buyer who was assisted by a broker in the purchase of a property from the BSP shall not be allowed assistance by the same or any other broker in the purchase of another unit or property located in the same condominium building complex, row house or subdivision regardless of phase.

46. How can one be accredited by the BSP?

The broker has to be licensed and must submit the following documents:

• Photocopy of valid Real Estate Broker’s License, duly certified by Department of Trade and Industry (DTI);
• Photocopy of valid HLURB Certificate of Registration (for those selling subdivision lots and condominium units)
• Certificate of Good Standing from a Broker’s Association;
• Photocopy of Certificate of Registration Issued and Certified by the DTI;
• Notarized Certification of no pending case (for corporations/partnerships);
• Photocopy of Income Tax Return (ITR) for two years;
• Photocopy of TIN Card;
• National Bureau of Investigation (NBI) or Police Clearance;
• Two recent “2 x 2” pictures;
• Value Added Tax (VAT) or non-VAT Certificate of Registration.

47. What qualifications are required from brokers?

The Broker shall have the following minimum qualifications:

• duly licensed;
• in good standing;
• of good moral character; and
• must not have been charged with any crime or offense involving moral turpitude.

48. What are the duties and responsibilities of a broker?

Brokers are required to:

• Inform prospective buyers of the BSP terms and conditions of the sale.
• Obtain documents from the BSP to be furnished to clients.
• Coordinate with the BSP Account Officer to be updated on new developments.
• Ascertain and disclose to buyers all pertinent facts concerning every property.

49. Can the BSP revoke accreditation previously conferred on brokers?

Yes. The accreditation as a broker is a privilege and may be withdrawn anytime by the BSP, upon due notice. The grounds for revocation of accreditation are as follows:

• The broker is no longer a member of good standing of the Association/Organization of which the broker is a member;
• The broker has been found by AMD to have violated the Broker’s Code of Ethics;
• The broker did not perform the duties as stated in the Notice of Accreditation;
• The broker is a defendant/respondent in a case involving moral turpitude filed in court or quasi-judicial body; and
• The broker has been convicted of a crime penalized by the Revised Penal Code or special criminal laws.

50. How much commission does BSP give its brokers?

A broker is entitled to a graduated rate of commission based on the selling price of the property; however, for sales to government employees of properties qualified under the socialized housing category, the commission is fixed at P2,500.00.

51. Under what conditions will a broker not be entitled to a commission?

• The broker has no Authority to Sell from the BSP;
• If the right to purchase will later on be assigned to the broker;
• The sale is to: a) a government institution; b) a buyer who had purchased another unit or property located in the same condominium, rowhouse, or subdivision, regardless of phase; c) a BSP employee or a relative of the BSP employee within the first degree of consanguinity or affinity; and d) the former owner(s) or present occupant(s) of the property subject of sale; and
• The broker did not perform all the duties and responsibilities stated in the Letter of Accreditation.

52. Will a BSP employee who brokered the sale be entitled to a commission?

No, BSP employees are not entitled to commission.

53. When is commission paid?

Commission is paid as follows: 1) cash sales- upon full payment of the purchase price and execution and return to Asset Management Department of Deed of Sale; 2) installments sale- upon full payment of the required down payment and execution and return to AMD of the Contract to Sell.

54. Does the BSP allow the lease of its properties?

Yes, the BSP allows the lease of its properties.

55. How long can the properties be leased?

Leases are mostly on a short-term basis. However, long-term leases are allowed on a case-to-case basis, specially for commercial properties.

56. How often do you increase your lease rate?

A multi year lease contract normally provides for an escalation rate of five percent based on the previous year’s basic rate, starting on the second year. However, for lease transaction covered by a contract on a month-to-month basis or for extension, the lease rate will be based on the prevailing rental rate.

57. Who shoulders the Value Added Tax?

The payment of the VAT is for the account of the lessee.

58. What other conditions do you require?

The lessee is required to pay two months security deposit and one month advance rental.

59. Is renovation of the property being leased allowed?

Yes, as properties are being leased on an “as-is, where-is” basis, the lessee is allowed to introduce renovations to the property subject to the approval of the BSP.

60. Who shoulders the cost of the renovation?

The lessee shoulders the cost of the renovation without remuneration after the end of the term of the lease.

61. Do you allow free rent during the renovation period?

Yes, the BSP allows on a case-to-case basis free rent for a limited period while the renovation of the property is on-going, provided condominium/association dues and utility costs shall be for the account of the lessee.

62. Who shoulders the cost of utilities and condominium/association dues during the rent period?

The lessees shoulder the payment of the condominium/association dues, in addition to the cost of utilities.

63. What happens if the property being leased is sold to another party?

If the property is leased on a month-month basis, the lessee is requested to vacate the property once the property is sold. However, for long term leases, the BSP requests the new owner to honor the existing lease contract.

64. Do you give discounts for prompt payments?

Yes, the BSP gives discount equivalent to one month if one year advance rent is paid within the first five days of the yearly rental period.

65. What happens if the tenant is in arrears in the payment of rent?

The BSP charges an interest of two percent per month for late payment of rent computed from due date to the date of payment.

66. What documents do you require from the interested lessees?

The lessee is required to accomplish a Lessee Information Sheet and to submit the following:

Individual:

• Photocopy of Community Tax Certificate
• “2 x 2″ ID Picture
• Proof of Income (latest ITR, Certificate of Employment, Business permit, etc.)
• Employer’s Certificate
• Bank Accounts

Corporate:

• SEC Registration, Articles of Incorporation, Business Permit
• Audited Financial Statements for the last two years
• Board Resolution and Secretary’s Certificate authorizing the lease and the signatories

Source: http://www.bsp.gov.ph/downloads/Publications/FAQs/assets.pdf

Happy Hunting!

—

To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Follow me in twitter:http://twitter.com/jay_castillo
Become a Fan in Facebook:Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

PPS. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

Bangko Sentral ng Pilipinas foreclosed properties for sale as of November 30, 2009 plus FAQ is a post from: Foreclosure Investing Philippines

Incoming search terms:

For the very first time, I am featuring a listing of properties to be auctioned in a  foreclosure sale. During the past year (Yes, Foreclosure Philippines is already more than 1 year old), I have been featuring information and listings for the two most common types of foreclosures we can invest in here in the Philippines. These are bank foreclosed properties or acquired assets and real property being sold through tax foreclosure auctions.

Foreclosure sale auctions
This time around I want to introduce everyone to foreclosure sale auctions. Foreclosure sales are quite new to me which is why I have done my homework by trying to learn as much about them and I shared an overview through my previous posts about Act 3135 as amended by Act 4118.

Where to find notices of foreclosure sale auctions
As per Section 3 of Act 3135 as amended by Act 4118, “Notice shall be given by posting notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated, and if such property is worth more than four hundred pesos, such notice shall also be published once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city.”

I usually find notices for upcoming foreclosure sales posted outside the Register of Deeds of Marikina City although I often see them after the auction date… bummer. Now however, I was finally able to find a public auction announcement for a foreclosure sale for prime properties through a newspaper ad and this appears to be from the Star Group of Companies.

Click here to download the listing of properties included in the foreclosure sale of prime properties by the Star Group

Source: Manila Bulletin, December 20, 2009 issue

Foreclosure sale details
I would like to share the following information which I got by simply calling to inquire about one of the properties on the list:

• Payment shall be in the form of cash or manager’s checks for the entire winning bid. I believe the winning bidder has five working days to come up with the full payment.
• The creditor will be participating in the bidding and will make the minimum bid which is usually equal to the outstanding loan balance they want to recover. If there are no other bidders, the property will become their acquired asset or foreclosed property, which they will then dispose through a public auction or sell them through negotiated sale as banks normally do.
• The foreclosure sale will be conducted through a sealed bidding.
• The mandatory 12 month redemption period starts when the winning bidder facilitates the annotation of the Certificate Of Sale (COS) on the title of the subject property at the Register of Deeds
• The requirements to participate in the foreclosure sale are available at the office of the Sheriff
• Just in case the previous owner is able to redeem the property before the lapse of the 12 month redemption period, the winning bidder is entitled to earn interest with an interest rate of 12% for 12 months or 1% per month

Please bear in mind that I will have to confirm if the information above are 100% accurate by checking with the office of the Sheriff that covers the location of one of the properties on the foreclosure listing. I’ll post additional information as they become available.

—

To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Follow me in twitter:http://twitter.com/jay_castillo
Become a Fan in Facebook:Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

PPS. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

The Star Group of Companies invites everyone to a foreclosure sale of prime properties! is a post from: Foreclosure Investing Philippines

Incoming search terms:

As mentioned in my previous post which contains the full text of Act No. 3135, I am posting here Act No. 4118 which amends the original Act 3135. However, after reading the contents of Act No. 4118, I am inclined to believe that the full text of Act 3135 which I shared in my previous post was already Act 3135 as amended by Act 4118.

Why am I posting these? For starters, I just want to be sure that we are all on the same page when it comes to extrajudicial foreclosure sales in the Philippines. Please continue reading to find out more…

ACT NO. 4118 – AN ACT TO AMEND ACT NUMBERED THIRTY-ONE HUNDRED AND THIRTY-FIVE, ENTITLED “AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES.”

SECTION 1. Section six of Act Numbered Thirty-one hundred and thirty-five, entitled “An Act to regulate the sale of property under special powers inserted in or annexed to real-estate mortgages,” is hereby amended to read as follows:

“Section 6. In all cases in which an extrajudicial sale is made under the special power herein before referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale; and such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.”

SECTION 2. The following three sections are hereby inserted after section six of said Act Numbered Thirty-one hundred and thirty-five:

“Section 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

“Section 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal.

“Section 9. When the property is redeemed after the purchaser has been given possession, the redeemer shall be entitled to deduct from the price of redemption any rentals that said purchaser may have collected in case the property or any part thereof was rented; if the purchaser occupied the property as his own dwelling, it being town property, or used it gainfully, it being rural property, the redeemer may deduct from the price the interest of one per centum per month provided for in section four hundred and sixty-five of the Code of Civil Procedure.”

SECTION 3. The number of the present section seven of said Act Numbered Thirty-one hundred and thirty-five is hereby changed, making it section ten.

SECTION 4. This Act shall take effect on its approval.

Approved, December 7, 1933

Source: http://www.chanrobles.com/acts/actsno4118.html

To date I have only been featuring information and listings of two of the most common types of foreclosures we can invest in here in the Philippines. These are bank foreclosed properties or acquired assets and real property being sold through tax foreclosure auctions.

Soon I will be posting listings and information about a third type of foreclosures which are properties that are to be sold through an extrajudicial foreclosure sale. This is governed by Act 3135 as amended by Act 4118 hence if you are interested in participating in such auctions, you can use these as reference on how they are generally conducted.

Subscribe now to e-mail alerts if you want to be notified when I post these listings.

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To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Follow me in twitter:http://twitter.com/jay_castillo
Become a Fan in Facebook:Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

PPS. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

Act 4118 – Act 3135 as amended and governs extrajudicial foreclosures is a post from: Foreclosure Investing Philippines

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I attended a seminar on how to prevent foreclosures more than a year ago and I often heard the speaker talk about Act No. 3135 which is An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real Estate Mortgages. I can’t remember exactly who gave the seminar because my notes and handouts were also destroyed during typhoon Ondoy’s visit, maybe if and when I find notes in my only laptop that got saved, I can share more details on that seminar about foreclosure prevention. That was the first and only seminar I have attended that thoroughly discussed Act 3135 which is often referenced by court rulings pertaining to foreclosures in the Philippines.

As far as I understand, Act No.  3135 governs extrajudicial foreclosures in the Philippines. Sorry, I really can’t  so I will not attempt to discuss the salient features of Act 3135, I will just share its full text here for easy reference for everyone, took me quite some time to find this! Here you go…

ACT NO. 3135 – AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES

SECTION 1. When a sale is made under a special power inserted in or attached to any real-estate mortgage hereafter made as security for the payment of money or the fulfillment of any other obligation, the provisions of the following election shall govern as to the manner in which the sale and redemption shall be effected, whether or not provision for the same is made in the power.

SECTION 2. Said sale cannot be made legally outside of the province in which the property sold is situated; and in case the place within said province in which the sale is to be made is subject to stipulation, such sale shall be made in said place or in the municipal building of the municipality in which the property or part thereof is situated.

SECTION 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated, and if such property is worth more than four hundred pesos, such notice shall also be published once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city.

SECTION 4. The sale shall be made at public auction, between the hours or nine in the morning and four in the afternoon; and shall be under the direction of the sheriff of the province, the justice or auxiliary justice of the peace of the municipality in which such sale has to be made, or a notary public of said municipality, who shall be entitled to collect a fee of five pesos each day of actual work performed, in addition to his expenses.

SECTION 5. At any sale, the creditor, trustee, or other persons authorized to act for the creditor, may participate in the bidding and purchase under the same conditions as any other bidder, unless the contrary has been expressly provided in the mortgage or trust deed under which the sale is made.

SECTION 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale; and such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.

SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

SECTION 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal.

SECTION 9. When the property is redeemed after the purchaser has been given possession, the redeemer shall be entitled to deduct from the price of redemption any rentals that said purchaser may have collected in case the property or any part thereof was rented; if the purchaser occupied the property as his own dwelling, it being town property, or used it gainfully, it being rural property, the redeemer may deduct from the price the interest of one per centum per month provided for in section four hundred and sixty-five of the Code of Civil Procedure.

SECTION 10. This Act shall take effect on its approval.

Approved: March 6, 1924

Source: http://www.chanrobles.com/acts/actsno3135.html

By the way, there is an amendment to Act No. 3135 and it is Act No. 4118. I’ll also share the full text of this act here in one of my next posts. Feel free to to leave a comment below if you want to share any insights, I would be very thankful and would appreciate it very much!

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On a different note, if you have read one of my tweets or status update in facebook, you probably already know how heavy my workload has been this month of December. In addition, my wife and I are still very busy looking for a sound investment we can call our new home. If I have been unable to answer a comment here or any of your  e-mail or text messages, please accept my apologies. I humbly ask for more patience and let me reassure you all that things will improve soon.

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My vision – financial freedom for all!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Follow me in twitter: http://twitter.com/jay_castillo
Become a Fan in Facebook: Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

PPS. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

Act No. 3135 – An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real Estate Mortgages (full text) is a post from: Foreclosure Investing Philippines

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A transfer tax is imposed on tax on the sale, donation, barter, or any other mode of transferring ownership or title of real property at the maximum rate of 50% of 1% (75% of 1% in the case of cities and municipalities within Metro Manila) of the total consideration involved in the acquisition of the property or of the fair market value in case the monetary consideration involved in the transfer is not substantial, whichever is higher. This is pursuant to Section 135 of the Local Government Code of 1991 (LGC).

You need to pay the transfer tax because the evidence of its payment is required by the Register of Deeds of the province concerned before registering any deed. This is also required by the provincial assessor before cancelling an old tax declaration and issuing a new one in its place. Please do not confuse the transfer tax which is paid to the local government with the transfer taxes due to the BIR (which may either be donor’s or estate taxes).

Disclaimer: While great effort has been taken to ensure the accuracy of the discussion here as of its writing, this is not intended to replace seeking professional services. Always consult with your tax attorneys and read up on the relevant laws and regulations also.

Who should pay
The payment of the transfer tax is the responsibility of the seller, donor, transferor, executor or and administrator.

When to pay
The deadline for payment is sixty (60) days from the date of the execution of the deed or from the date of the decedent’s death. Please note too that notaries public are required to furnish the provincial treasurers with a copy of any deed transferring ownership or title to any real property within thirty (30) days from the date of notarization.

Where to pay
The transfer tax is to be paid at the Treasurer’s Office of the city or municipality where the property is located.

Requirements
In general, the requirements for the payment of transfer tax are the following:

• Certificate Authorizing Registration from the Bureau of Internal Revenue;
• Realty tax clearance from the Treasurer’s Office; and
• Official receipt of the Bureau of Internal Revenue (for documentary stamp tax).

Transfer Tax Rates
With regard to the transfer tax rates, please click on the links to see the different transfer tax rates and documents required to transfer the registration of a property. You have to check the rates on a per city or per municipality basis as the LGC only provides for the maximum rates. Click on the links below for the transfer tax rates of major cities.

• Manila
• Caloocan – [I have no idea why the transfer tax rate in Caloocan is 82.5% of 1%]
• Cebu
• Davao
• Las Pinas
• Makati
• Mandaluyong
• Marikina
• Pasig
• Quezon City

The http://www.doingbusiness.org site is so cool. You can learn about the requirements for registering property, etc., with cost and estimated time to complete.

Transfer Tax Base
In the case Romulo D. San Juan vs. Ricardo L. Castro, in his capacity as City Treasurer of Marikina City [G.R. No. 174617 dated December 27, 2007], one of the issues was the proper computation of the transfer tax base. In this case, petitioner San Juan conveyed real properties to a corporation in exchange for its shares of stock[1]. Using as basis Section 135 of the LGC, San Juan wanted to pay the transfer tax based on the consideration stated in the Deed of Assignment. Respondent Castro, as the Treasurer, informed him that the tax due is based on the fair market value of the property. Petitioner Castro protested the Treasurer’s computation in writing, which the Treasurer also denied in writing. Petitioner Castro then filed a Petition for mandamus and damages against the Treasurer praying that he be compelled to accept payment of the transfer tax based on the actual consideration of the transfer/assignment.

The bone of contention was the proper interpretation of Section 135 of the LGC which provides:

“SECTION 135.   Tax on Transfer of Real Property Ownership. (a) The province may impose a tax on the sale, donation, barter, or on any other mode of transferring ownership or title of real property at the rate of not more than fifty percent (50%) of the one percent (1%) of the total consideration involved in the acquisition of the property or of the fair market value in case the monetary consideration involved in the transfer is not substantial, whichever is higher. The sale, transfer or other disposition of real property pursuant to R.A. No. 6657[2] shall be exempt from this tax. xxx”

Petitioner San Juan took the position that the transfer tax base should be the total consideration involved, because the intention of the law is not to automatically apply the “whichever is higher” rule. He argued that it is only when there is a monetary consideration involved and the monetary consideration is not substantial that the tax rate is based on the higher fair market value. His argument was that since he received shares of stock in exchange for the real properties, there was no monetary consideration involved in the transfer.

Respondent Castro, on the other hand, took the position that the transfer tax base should be the fair market value, because it is higher than the “monetary consideration” San Juan received in exchange for his real properties. Castro argued that “monetary consideration” as used in the LGC does not only pertain to the price or money involved but also, as in the case of donations or barters, to the value or monetary equivalent of what is received by the transferor, which, in this case, Castro argued to be the par value of the shares of stock San Juan transferred in exchange for shares of stock.

As anticlimactic as this may sound, the Court did not rule squarely on the correct computation of the transfer tax base because it held that a Petition for Mandamus was not the correct remedy. Mandamus lies only to compel an officer to perform a ministerial duty (one which is so clear and specific as to leave no room for the exercise of discretion in its performance) but not a discretionary function (one which by its nature requires the exercise of judgment).

Sample Computation
Considering that there is still an issue as to the proper computation of the transfer tax base, I suggest that we not delve into the various interpretations of Section 135 of the LGC and simply multiply the transfer tax rate by the higher amount between the consideration paid and the fair market value.

Let’s take for example a residential condominium in Makati City with a floor area of 50sqm with a Selling Price (SP) of 1.0M. The existing zonal value per square meter for that condo in Makati is currently Php50,000/sqm.

First let’s compute for the Fair market Value (FMV):

FMV=Zonal Value x Floor Area
=50,000 pesos/sqm x 50sqm
=2,500,000 pesos

Since FMV is higher than SP, we shall use FMV to compute the transfer tax:

Makati City Transfer Tax Rate: 0.6% [that is, 60% of 1%]

Transfer Tax = 0.6% x 2,500,000 = P15,000

What if you don’t agree with the Treasurer’s computation?
Assuming you disagree with the tax assessment made by a local treasurer, you may file a written protest thereof pursuant to Section 195 of the LGC, which provides:

“SECTION 195.            Protest of Assessment. — When the local treasurer or his duly authorized representative finds that the correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee, or charge, the amount of deficiency, the surcharges, interests and penalties.  Within sixty (60) days from the receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become final and executory. The local treasurer shall decide the protest within sixty (60) days from the time of its filing. If the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice cancelling wholly or partially the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty-day (60) period prescribed herein within which to appeal with the court of competent jurisdiction, otherwise the assessment becomes conclusive and unappealable.”

In the case earlier discussed, the Petitioner protested in writing against the assessment and Respondent denied it in writing as well. Petitioner should thus have either: 1) appealed the assessment before the court of competent jurisdiction, or 2) paid the tax and then sought a refund.

In my view, the Petitioner San Juan could have made another argument, that is, assuming that the “monetary consideration” would be equivalent to the par value of the stocks (which is still lower than the fair market value), that value is substantial and thus, there is no need for the “whichever is higher” provision to kick in. Anyway, hopefully this issue would be decided upon squarely soon as there are really a lot of tax-free exchanges occurring and we really need guidance on the computation of transfer tax. Perhaps one day a taxpayer and his tax attorneys may decide to bring this issue up until the Supreme Court for a final decision.

Taking everything into consideration, personally, unless the difference in tax that you need to pay is really significant, it would be better to follow the computation of the Treasurer. Filing a case in court would require filing fees and fees for tax attorneys, not to mention taking up much of your time. If you will not pay the transfer taxes, you cannot transfer the title to your name and this would lead to problems with your buyer and the closing of your sale transaction. Weigh your options first before heading to battle. In real estate, as in everything, closing the deal fast is key.

[1] We will discuss the mechanics of a tax-free exchange in a later post

[2] Comprehensive Agrarian Reform Program

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To our financial freedom!

Jay (and Cherry) Castillo
Real Estate Investor
REBL#: 20056
Blog: http://www.foreclosurephilippines.com
Social Network: http://foreclosurephilippines.ning.com
Mobile: +639178843882
E-mail: ph.investor@gmail.com

Text by Jay and Cherry Castillo. Copyright © 2009 All rights reserved.

What is Transfer Tax? is a post from: Foreclosure Investing Philippines

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