Foreclosure Guide
Understanding foreclosed properties and how to buy them in the Philippines
Foreclosure occurs when a borrower fails to pay their mortgage loan, and the lender (bank, Pag-IBIG, or private financing company) takes legal action to recover the property and sell it to repay the outstanding debt.
Judicial Foreclosure
Goes through the courts. Longer process (1-3 years) but borrower has redemption rights even after sale.
Extrajudicial Foreclosure
Done through a notary public (Act 3135). Faster (3-6 months) with 1-year redemption period.
- 1Default
Borrower misses payments (usually 3+ months). Bank sends demand letters.
- 2Notice of Sale
Published in newspaper of general circulation for 3 consecutive weeks. Posted in public places.
- 3Public Auction
Property is sold to highest bidder. Minimum bid is usually the outstanding loan.
- 4Certificate of Sale
Issued to winning bidder. Registered with Registry of Deeds.
- 5Redemption Period
1 year for extrajudicial (banks), 1 year for Pag-IBIG. Borrower can buy back the property.
- 6Consolidation of Title
After redemption period expires without redemption, buyer can consolidate ownership and get a new title.
Pag-IBIG Acquired Assets
Properties from defaulted Pag-IBIG housing loans. Often below market value.
View Pag-IBIG ListingsBank Foreclosures
Each bank has its own ROPA (Real and Other Properties Acquired) listings.
Check: BDO, BPI, Metrobank, PSBank, etc.
NHA Properties
National Housing Authority foreclosed properties.
Contact NHA regional offices.
Advantages
- Below market value (10-40% discount)
- Clean title (liens are cleared after consolidation)
- Bank financing often available
- Good investment potential
Risks
- May have occupants (eviction needed)
- Property condition unknown (sold "as is")
- Redemption risk during redemption period
- Additional costs (repairs, back taxes, legal fees)
- Limited inspection opportunities
- Title Verification
Get Certified True Copy from Registry of Deeds. Check for other liens or encumbrances.
- Ocular Inspection
Visit the property. Check condition, occupancy status, and neighborhood.
- Tax Status
Check real property tax status. You may need to pay back taxes.
- HOA/Condo Status
Check for unpaid HOA dues or condo assessments.
- Foreclosure Documents
Review Notice of Sale, Certificate of Sale, and any court orders.
- Set a maximum bid and stick to it — don't get caught in bidding wars
- Factor in repair costs, back taxes, and legal fees when calculating your bid
- Have funds ready — winning bidders usually need to pay deposit immediately
- Consider hiring a lawyer familiar with foreclosure procedures
- For Pag-IBIG, you can use your Pag-IBIG savings or housing loan to finance
- Some banks offer "negotiated sale" if auction fails — you can negotiate directly
Important Warning
Buying foreclosed property carries significant risks. Always conduct thorough due diligence and consider hiring a lawyer and licensed broker who specializes in foreclosures. Never buy based solely on low price — understand all the potential costs and complications.