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Bill seeks to bar TROs over foreclosed properties


MANILA, Philippines - A bill pending in the House of Representatives seeks to bar unscrupulous parties from abusing court procedures to delay the auctioning of foreclosed properties. House Bill 5530 seeks to prohibit courts from issuing restraining orders or preliminary injunction in cases involving public auction sales arising from such foreclosure. "During this time of global financial recession, there is an imperative need to protect the interest not only of banks but other financial institutions in the country in order to ensure the long-term financial stability of our economy," House committee on banks and financial intermediaries vice chairman Rep. Al Francis Bichara (Albay) said in an article on the House of Representatives website. The bill also calls for the protection of banks and financial institutions against scheming and unscrupulous debtors to ensure the national economy's long-term financial stability. Bichara sought the immediate passage of the bill amid the global crisis. In the Philippines, Bichara said loans, most especially those involving large amounts of money, are usually secured by real estate mortgages. "Unfortunately, the power of banks to collect and foreclose said real estate mortgages upon default of the debtors are usually hampered by the injunctive power of the courts which are sometimes used by cunning debtors unjustifiably," he said. Bichara said public auction sales arising from extra-judicial foreclosure of real estate mortgages generally enjoy the presumption of regularity. "More importantly, even the Supreme Court has already adopted measures to temper the injunctive powers of courts in relation to extra-judicial foreclosure proceedings, in order to fully protect the interest of innocent lenders and, or creditors," he said. The bill seeks to prohibit courts from issuing restraining orders or preliminary injunction in cases involving public auction sales arising from the foreclosure of real estate mortgages in the Philippines. It provides that no court shall have the jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute or controversy involving public auction sales arising from foreclosure of real estate mortgages, including the prohibition of any person or persons, entity or governmental official from proceeding with, or continuing the execution or implementation of public auction sales arising from extra-judicial foreclosure of real estate mortgages provided that certain basic essential requisites are duly complied with. These requisites include that the Notice of Sale has been posted for not less than 20 days in at least three public places of the municipality or city where the property is situated. If such property is worth more than P50,000, such notice should be published once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city. Also, it provides that despite the absence of these basic requisites, no restraining order, preliminary injunction or preliminary mandatory injunction shall be issued when the mortgagee has clearly established that the loan secured by the real estate mortgage is due and demandable and that the mortgagor is delinquent in his payment and or has failed to make payments. It also provides that no restraining order, preliminary injunction, or preliminary mandatory injunction shall be issued based solely on the following mere allegations of the mortgagee: That the loan secured by the real estate mortgage has been paid, or is not delinquent; and, That the interest in the loan secured by the real estate mortgage is unconscionable. - GMANews.TV
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