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Bill seeking to prevent TROs vs extrajudicial foreclosure of real estate mortgages

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A BILL seeking to prohibit courts from issuing restraining orders or preliminary injunctions in certain extrajudicial and judicial foreclosure cases of real estate mortgages has been filed at the Senate.

Senator Maria Lourdes Nancy S. Binay last month filed Senate Bill No. 1943, the proposed Real Estate Mortgage Foreclosure Proceedings Act of 2018.

The measure seeks to prohibit courts from issuing restraining orders or preliminary injunctions in the following instances:

• An allegation that the loan secured by the mortgage has been paid or is not delinquent, unless the application for the restraining order and/or preliminary injunction or preliminary mandatory injunction is verified and duly supported by evidence of payment of the loan.

• An allegation that the interest on the loan is usurious or unconscionable, unless the debtor pays the mortgages 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. In case of failure by the debtor to update payment of the twelve percent per annum interest, the preliminary injunction or preliminary mandatory injunction may be filed.

The bill also provides for speedy disposition of cases where a writ of preliminary injunction or preliminary mandatory injunction has been issued against a foreclosure of mortgage.

In the explanatory note, Ms. Binay said the proposed measure was consistent with the Supreme Court Resolution A.M. No. 99-10-05-0 issued in 1999 and amended in 2001, which details the procedure in extra-judicial foreclosure of mortgage.

In 2007, the SC provided additional rules on the resolution prohibiting courts to issue restraining orders or preliminary injunction against extrajudicial foreclosure cases.

Ms. Binay said the resolution was issued to discourage party-litigants from delaying foreclosure proceedings by filing applications for restraining order or writ of preliminary injunction.

“However, despite the specific mandate of the Supreme Court, there are instances when courts grant the restraining order or writ notwithstanding the absence of evidence in support of the application. Thus, foreclosure proceedings are unduly delayed and, consequently, impair legitimate commercial interests,” the senator said.

“Public policy dictates that legitimate commercial interests must be protected from unscrupulous litigants who abuse the judicial system,” she added, citing Section 20, Article 2 of the 1987 Constitution which recognizes the role of private sector. — Camille A. Aguinaldo