Overview

A real estate mortgage (REM) is an accessory contract that secures the performance of a principal obligation—usually a loan—by creating a lien over immovable property. In the Torrens system, that lien is annotated on the Certificate of Title (TCT/OCT/CCT) to bind third persons. When the secured obligation is extinguished (e.g., by full payment), the mortgage lien should likewise be extinguished and its annotation canceled at the Registry of Deeds (ROD). This article explains when and how to cancel the annotation, including documentary requirements, procedure, fees, special cases, and remedies.

Legal Foundations (Plain-English)

Mortgage is accessory. Extinguishing the principal obligation (payment, condonation, novation, etc.) extinguishes the mortgage.
Registration gives notice. The lien exists against third persons because it appears on the title; removing that notice requires registration of a proper release or cancellation instrument.
ROD control. The Registry of Deeds cancels annotations only upon presentation of registrable documents that comply with formal requirements (proper execution, notarization, proof of authority, and payment of fees).
Judicial fallback. If the mortgagee refuses or cannot execute a release despite satisfaction, the court may order cancellation, and the ROD will implement the court’s directive.

Typical Grounds for Cancellation

Full payment of the loan and all obligations secured by the mortgage.
Condonation/waiver by the mortgagee.
Foreclosure completed and new title issued to the purchaser (the mortgage is merged or otherwise rendered unnecessary).
Loss or destruction of the mortgaged property (subject to rules on risk allocation).
Invalidity or nullity of the mortgage (upon final judgment).
Novation that extinguishes the mortgage lien (rare; must be explicit).

Core Documents You’ll Usually Need

Registries differ slightly; bring originals and at least two photocopies.

Owner’s duplicate title (TCT/OCT/CCT) containing the mortgage annotation.
Release of Real Estate Mortgage (a/k/a “Discharge,” “Cancellation of Mortgage,” or “Deed of Release”), executed by the current mortgagee (see “Assignments” below), notarized, and containing:
- Parties (mortgagor, mortgagee), property description, title number, and mortgage entry number/date.
- Statement that the obligation has been fully satisfied and the mortgage is released and canceled.
- Express authority/directive to the ROD to cancel the annotation.
Proof of authority of signatory for corporate mortgagees (e.g., Secretary’s Certificate naming the authorized officer; for banks, board resolution or omnibus authority).
Valid identification of signatory/authorized representative.
Special Power of Attorney (SPA) if an agent is filing on behalf of the owner or mortgagee.
Promissory note/loan documents marked “PAID” (some RODs ask for this as supporting proof).
Evidence of assignment (if the mortgage was assigned). Ensure any Assignment of Mortgage and subsequent assignments are registered; the last assignee must issue and sign the release.
Apostille/consularized documents if executed abroad (Apostille accepted in lieu of consularization in most cases).
Payment for ROD fees (entry, annotation/cancellation, certification). No capital gains tax or transfer taxes apply because no ownership transfer occurs; documentary stamp tax was paid on the original mortgage, not on its release.

Step-by-Step Procedure at the Registry of Deeds

Secure the Release:
- Request the bank/creditor to prepare and notarize the Release of Real Estate Mortgage once the loan is fully paid.
- Verify the exact mortgage entry number and date as shown on your title’s encumbrance page; mirror them in the release.
Pre-check the Paperwork:
- Confirm the property description and title number match your certificate of title.
- For corporations/banks, attach the authority of the signing officer. For documents signed abroad, attach Apostille.
Present for Registration:
- Go to the ROD where the title is registered.
- Submit: Owner’s duplicate title, Release of REM, IDs, authority documents, and any supporting papers.
- Pay the entry and cancellation fees.
Registry Action:
- The ROD records the release, cancels the mortgage annotation on the original and your owner’s duplicate, and places a new entry noting the cancellation.
Claim Your Title:
- After processing, receive your owner’s duplicate title with the mortgage annotation struck out or marked canceled, plus the new memorandum entry recording the cancellation.

Special Situations and How to Handle Them

1) The Mortgage Was Assigned

If your mortgage was sold or transferred (common in bank portfolio sales), the assignee is now the mortgagee of record.
Ensure the Assignment of Mortgage is registered first (if it isn’t already). Only the current mortgagee of record may issue a valid Release.

2) The Owner’s Duplicate Title Is Lost

File for replacement of owner’s duplicate under the Property Registration Decree (petition or administrative remedy, as applicable).
Once the replacement owner’s duplicate is issued, proceed with cancellation using the replacement title.

3) Mortgagee Refuses to Issue a Release

Send a written demand attaching proof of payment; offer to shoulder reasonable documentation costs.
If refusal persists, file a civil action (e.g., specific performance and cancellation of annotation) or a land registration case to direct the ROD to cancel the annotation.
A final judgment or court order is registrable and compels the ROD to cancel.

4) Mortgagee Closed or Dissolved (e.g., bank under receivership)

Coordinate with the statutory receiver/liquidator (e.g., PDIC for banks) or the corporation’s winding-up officers.
Obtain a release from the proper authority together with proof of authority; register it as usual.

5) Release Executed Abroad

Have the release notarized in the foreign jurisdiction and Apostilled (or consularized if Apostille not available).
Attach the Apostille and ID of the signatory; the ROD will accept it as to form if compliant.

6) Foreclosure Path

If foreclosed and title consolidated to the purchaser, the mortgage is functionally extinguished.
The ROD typically issues a new title to the purchaser; the mortgage annotation on the prior title becomes moot. If still appearing, present the foreclosure and consolidation documents to clear residual entries.

7) Multiple Mortgages / Junior Liens

Cancel each lien separately with a corresponding release, following lien priority (first mortgage first, etc.), unless a consolidated release explicitly covers all annotated mortgages by number and date.

8) Equitable Mortgages / Unregistered Land

If the land wasn’t registered and the mortgage appears only as an adverse claim or other annotation, register a cancellation of adverse claim or the court’s order voiding it, as applicable.

Practical Drafting Notes (Release of REM)

Use exact names, corporate styles, titles, and tax IDs as in the original mortgage.
Quote the entry number and date of registration of the mortgage annotation verbatim.
Insert a clear directive: “The Registry of Deeds is hereby requested and authorized to cancel the annotation of the mortgage described above.”
Include the technical description or at least the lot/block and area with the title number.
For corporations, attach a Secretary’s Certificate authorizing the signatory and attesting to the board resolution.
Ensure notarization complies with Philippine Notarial Practice (or foreign law + Apostille).

Illustrative one-paragraph core clause:

“For and in consideration of the full and complete payment and satisfaction of the obligations secured by the Real Estate Mortgage dated [date], registered as Entry No. [_] on [date] on TCT No. [__], [Mortgagee] hereby releases and discharges said mortgage and irrevocably requests and authorizes the Registry of Deeds of [City/Province] to cancel the annotation thereof on the aforesaid title.”

What Not to Expect

No CAR or transfer taxes for a mere cancellation of a lien (no transfer of ownership occurs).
No need for HOA/condo admin approvals solely for mortgage cancellation (unless internal admin requirements apply for other reasons).
No new title number is issued; the same title remains, only the lien annotation is canceled.

Fees and Time Frames (General Guidance)

Expect ROD entry and annotation/cancellation fees and copy/certification fees if you request certified true copies.
Processing durations and exact fees vary by registry; check the fee schedule posted at the ROD.

Common Pitfalls (and How to Avoid Them)

Wrong party signs the release. Confirm who the current mortgagee of record is; register any assignments first.
Description mismatches. Ensure the release mirrors the title number, property description, and mortgage entry details.
Missing authority. For corporations/banks, attach proof of authority of the signatory.
Unapostilled foreign documents. Documents executed abroad must bear an Apostille (or be consularized).
Lost owner’s duplicate. Replace it before filing the cancellation.

Minimal Checklists

Borrower/Owner’s Checklist

Owner’s duplicate title (with mortgage annotation)
Notarized Release of Real Estate Mortgage
IDs; SPA if using a representative
Secretary’s Certificate/board resolution (if mortgagee is a corporation/bank)
Evidence of assignment chain (if any)
Funds for ROD fees

Filing Steps at ROD (At a Glance)

Get the notarized Release from the mortgagee.
Verify details vs. your title (entry no., date, description).
Submit documents + pay fees at the ROD of the title’s locality.
Receive your updated title showing the canceled mortgage annotation.

Remedies and Enforcement

If the mortgagee unreasonably refuses to sign a release after full payment, consider:

Demand letter and escalation to the bank’s legal/complaints unit.
Regulatory escalation (for banks, to the appropriate supervisory authority) where appropriate.
Court action for specific performance and cancellation, or a petition before the land registration court to direct the ROD to cancel the annotation. A final judgment is registrable and binding on the registry.

Final Notes

Keep certified true copies of the release and the updated title.
If you plan to sell or refinance, clear the annotation before engaging buyers or lenders to avoid delays.
When in doubt about special circumstances (assignments, corporate restructurings, lost titles), consult counsel so your release package is registrable on the first try.