Additional Rules on Temporary Restraining Orders (TRO) on Foreclosures of Real Estate Mortgage

The Supreme Court has issued additional guidelines on the issuance of temporary restraining orders or writs of preliminary injunctions enjoining foreclosures of real estate mortgages. The additional rules will take effect on March 10, 2007.

Here’s the full text of AM No. 99-10-05-O (Re: Procedure in Extrajudicial Or Judicial Foreclosure of Real Estate Mortgages, dated February 20, 2007):

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Acting on the recommendation of the Committee on the Revision of the Rules of Court, the Court RESOLVED to adopt the following additional rules with respect to the Extrajudicial or Judicial Foreclosure of Real Estate Morgages:

1. No temporary restraining order or writ of preliminary injunction against the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that the loan secured by the mortgage has been paid or is not delinquent unless the application is verified and supported by evidence of payment.

2. No temporary restraining order or writ of preliminary injunction against the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that the interest on the loan is unconscionable, unless the debtor pays the mortgagee at least 12 percent per annum interest on the principal obligation as stated in the application for foreclosure sale, which shall be updated monthly while the case is pending;

3. Where a writ of preliminary injunction has been issued against a foreclosure of mortgage, the disposition of the case shall be speedily resolved. To this end, the court concerned shall submit to the SC, through the Office of the Court Administrator, quarterly reports on the progress of the cases involving Php10 million and above;

4. All requirements and restrictions prescribed for the issuance of a temporary restraining order/writ of preliminary injunction, such as the posting of a bond, which shall be equal to the amount of the outstanding debt, and the time limitation for its effectivity, shall apply as well to a status quo order

Upon effectivity of these additional rules, all rules resolutions, orders and circulars of this Court, which are inconsistent therewith, are hereby repealed or modified accordingly.

These additional Rules in the Procedure in Extrajudicial or Judicial Foreclosure of Real Estate Mortgage shall take effect on March 10, 2007 following their publication in a newspaper of general circulation not later than February 28, 2007.