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February 26, 2002

[A.M. No. 99-10-05-0.]

RE: PROCEDURE IN THE EXTRA-JUDICIAL FORECLOSURE OF MORTGAGES

Gentlemen:

Quoted hereunder, for your information, is a resolution of the Court En Bancdated 26 February 2002.

A.M. No. 99-10-05-0 (Re: Procedure in the Extra-Judicial Foreclosure ofMortgages). — For consideration is the Memorandum, dated February 8, 2002, ofClerk of Court Luzviminda D. Puno transmitting the request of the Office of theCourt Administrator (OCA) for correction of Circular No. 7-2002 which the OCAhad earlier submitted to provide guidelines for the enforcement of A.M. No.99-10-05-0 and which was subsequently approved by this Court in its resolution ofJanuary 22, 2002. The corrections submitted for the Court's approval are as follows:

(1) [The] [l]etterhead should be that of the Office of the CourtAdministrator;

(2) [The] [t]itle of the circular should be deleted as the same is alreadystated in the subject matter;

(3) In relation to Sec. 4(b)(1), provision should be made as to personalnotice to debtor-mortgagor, and instead of Circular No. 5-98, 12January 1998, reference should be made to the new circular onpublication, i.e., Guidelines in the Accreditation of Newspapersand Periodicals and Distribution of Legal Notices andAdvertisements for Publication, Resolution promulgated on 16October 2001 in A.M. No. 01-1-07-SC; and

(4) The word "Sheriff" in Sec. 6 should be changed to "Clerk ofCourt", thus:

"Sec. 6. After the sale, the Clerk of Court shall collect . . . ."

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After due consideration of the request of the Office of the Court Administratorand finding the same to be well taken, the Court RESOLVED:

(1) to GRANT the aforesaid request for the correction of Circular No.7-2002, except No. 3 regarding the addition of a provision forpersonal notice of extrajudicial foreclosure of real estate mortgagesto the debtor-mortgagor, which is hereby denied. Personal notice tothe debtor-mortgagor in case of the extrajudicial foreclosure of realestate mortgage is not required by Act No. 3135 (Bonnevie v.Court of Appeals, 125 SCRA 122 (1983)), being merely theenforcement of the agreement of the parties to a contract(Community Savings and Loan Association, Inc. v. Court ofAppeals, 153 SCRA 564 (1987)). The addition of such requirementcan only make the procedure for extrajudicial foreclosurecumbersome; and

2) to AMEND Sec. 4 (b) (1) of its Circular No. 7-2002 so as to makeit read as follows:

Sec. 4. The Sheriff no whom the application forextra-judicial foreclosure of mortgage was raffled shall do the following:

b. (1) In case of foreclosure of real estate mortgage, causethe publication of the notice of sale by posting it for notless than twenty (20) days in at least three (3) publicplaces in the municipality or city where the property issituated and if such property is worth more than fourhundred (P400.00) pesos, by having such noticepublished once a week for at least three (3) consecutiveweeks in a newspaper of general circulation in themunicipality or city (Sec. 3, Act No. 3135, as amended).The Executive Judge shall designate a regular workingday and definite time each week during which said noticeshall be distributed personally by him for publication toqualified newspapers or periodicals as defined in Sec. 1of P.D. No. 1079, which distribution shall be effected byraffle (A.M. No. 01-1-07-SC, Oct. 16, 2001). UNLESSOTHERWISE STIPULATED BY THE PARTIES TOTHE MORTGAGE CONTRACT, THEDEBTOR-MORTGAGOR CONTRACT, THEDEBTOR-MORTGAGOR NEED NOT BE

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PERSONALLY SERVED A COPY OF THE NOTICEOF THE EXTRAJUDICIAL FORECLOSURE.

The Clerk of Court is directed to furnish the OCA a magnetic (diskette) copyof Circular No. 7-2002 so that the pertinent changes can be made pursuant to thisresolution. The OCA is directed to submit to the Court Circular No. 7-2002, as thuscorrected, for final approval and for determination of the date of its effectivity.

Very truly yours,

LUZVIMINDA D. PUNOClerk of Court

By:

(SGD.) MA. LUISA D. VILLARAMAAssistant Clerk of Court