How to Cancel a Real Estate Mortgage When No Release Document Is Available (Philippine Law, 2025 update)
1. Why a “release” matters
When a real-estate mortgage (REM) is paid in full, the lender (mortgagee) is legally bound to (a) execute a Deed of Release of Real-Estate Mortgage and (b) present it, with the owner, to the Register of Deeds (RD) so the annotation on the Transfer Certificate of Title (TCT) can be cancelled. Without that deed, the encumbrance remains on the title even though the loan is already extinguished (Civil Code arts. 2085-2092; Property Registration Decree / P.D. 1529, §§62-63).
2. “No release” situations & legal tools
| Scenario | Typical Reason | Governing Rule | Practical Remedy |
|---|---|---|---|
| A. Document lost but lender is cooperative | Misplaced originals, fire, flood, etc. | LRA Circular 07-2012 & RD practice | 1. Affidavit of Loss + Certification of Full Payment signed by the bank’s authorized officer 2. Board/Secretary’s Certificate (if corporation) giving that officer authority 3. Undertaking to re-execute should the original resurface 4. Pay cancellation fees & DST on release 5. RD cancels the mortgage annotation administratively |
| B. Lender has closed, merged, or is under receivership | Bank liquidation; merger; rural bank closure | P.D. 1529 §71; BSP/PDIC circulars | 1. Certification from BSP or PDIC that the bank is closed and all obligations satisfied 2. Copy of payment records or Bank Clearance 3. Verified Petition to Cancel Encumbrance under §71 filed with the RD (summary proceeding) 4. Publication-and-notice as directed by the RD/LRA 5. RD issues an order cancelling the entry |
| C. Lender cannot be located or refuses to sign | Uncooperative mortgagee; dispute on computations | Civil Code art. 1397; P.D. 1529 §108; Rule 74 LRC | 1. Demand letter (keep proof of service) 2. If still no action: Petition under §108 (Land Registration Court) or ordinary civil action to compel execution of release and cancellation of annotation 3. Court order, once final, is presented to RD for cancellation |
| D. Duplicate Owner’s Duplicate Title lost | Owner lost their duplicate TCT as well | Must reissue duplicate first (P.D. 1529 §109) via petition; after new duplicate is issued, follow A-C above |
3. Step-by-step guide (administrative route — Scenario A)
Gather bank papers
- Certification of Full Payment (must cite loan account number & property title)
- Affidavit of Loss of the original Deed of Release
- Secretary’s/Board Resolution naming the signing officer
Draft a substitute “Release-and-Quitclaim”
- Re-states the original mortgage details, amount, complete TCT numbers, and states unequivocally that the obligation is fully paid and the bank is waiving and renouncing all rights under the mortgage.
Notarize all instruments (place of execution must match venue rules in the 2004 Notarial Law).
Pay taxes & fees
- Documentary Stamp Tax on the release (₱20 for each ₱5,000 of the principal secured, but credit previously-paid DST; RD usually collects a nominal fixed DST for cancellations)
- RD entry fee (varies by province, typically ₱1,500-₱2,000)
Present to the Register of Deeds
- Owner’s duplicate TCT + Original mortgage annotated on it
- All notarized substitute documents
- Payment receipts
RD checks, annotates, cancels
- RD annotates the Release on both the original and owner’s duplicate and stamps “ENCUMBRANCE CANCELLED” opposite the mortgage entry.
Secure Certified True Copy (CTC) of the clean title.
Processing time: 3–10 working days after complete submission (longer in highly urbanized RDs).
4. Judicial route (Scenarios B & C — outline)
| Document/Step | Key Points |
|---|---|
| Verified Petition under §108 P.D. 1529 | Captioned “In Re: Petition to Cancel Mortgage Annotation,” filed with the RTC acting as LRC of the province/city where the land is located. |
| Parties | Registered owner (petitioner) vs. last known mortgagee (respondent). If entity is defunct, name BSP/PDIC as custodian/liquidator. |
| Allegations | Full payment, absence or loss of Release, efforts to locate or demand, legal basis for cancellation, prayer for order to cancel RD entry & for RD to issue new Owner’s Duplicate. |
| Evidence | Loan documents, receipts, demand letters, BSP/PDIC certifications, Affidavit of Loss (if applicable). |
| Publication/notice | Court normally orders publication once in a newspaper of general circulation + posting at the barangay hall/municipio + personal service to respondent last known address. |
| Court Order | After hearing, court issues judgment directing the RD to cancel the mortgage annotation. |
| Implementation | Present the final Order (with Certificate of Finality) to the RD, pay legal fees, obtain clean CTC. |
Court cases typically finish 4–12 months depending on docket congestion; publication costs vary (₱6,000–₱12,000).
5. Special rules for government housing loans
- Pag-IBIG Fund / HDMF – Issue a “Notice of Release of Mortgage” (Form HQP-AAF-187) printed on security paper; if lost, Pag-IBIG will re-print upon request with affidavit and processing fee.
- NHMFC-assigned loans – The Servicing Collection Agent (SCA) may issue a Certificate of No Outstanding Balance plus covering endorsement letter to the RD, which RDs now accept in lieu of the manual release.
- Land Bank / DBP – Use a Cancellation of Mortgage Entry on bank letterhead, notarized; if unavailable, proceed like Scenarios A or B.
6. Documentary checklist by scenario
| Scenario | Affidavit of Loss | Certification of Full Payment | Bank/PDIC/BSP Cert | Secretary’s Cert/Board Reso | Court Order | RD Fees & DST |
|---|---|---|---|---|---|---|
| A | ✔ | ✔ | — | ✔ | — | ✔ |
| B | ✔ (if applicable) | ✔ | ✔ | — | — (if RD grants) | ✔ |
| C | — | ✔ | — | — | ✔ | ✔ |
| D | ✔ (duplicate title) | ✔ | Depends | Depends | Depends | ✔ |
7. Case-law snippets
- Spouses Dy v. Court of Appeals, G.R. 159981 (2006) – A mortgagee may be compelled to execute a release once the obligation is proven paid; refusal is actionable as specific performance.
- Lazo v. Republic, G.R. 168647 (2012) – Land Registration Court can order cancellation of annotations under §108 where the underlying obligation has been extinguished and the mortgagee is defunct.
- Heirs of Malate v. Gonzales, G.R. 210654 (2019) – Exhaustion of administrative remedies with the RD is not required where the dispute is the validity of the mortgage itself; ordinary civil action suffices.
8. Practical tips & FAQs
- Keep originals – Secure the signed Deed of Release at the moment you make your last payment; insist on on-the-spot notarization.
- Ask for digital copies – Even if the bank can’t find the printed release, a scanned original in its imaging system speeds up replacement.
- What if the bank merged? – Trace the successor-in-interest; under the Corporation Code (R.A. 11232), the surviving or transferee corporation inherits duty to release the mortgage.
- Can I sell the property with an uncancelled mortgage annotation? – Technically yes, but buyers (and banks) will treat the lien as subsisting. The price will be discounted or they will require escrow until the annotation is cleared.
- Are surety bonds acceptable instead of a court order? – Some RDs allow a Redemption/Cancellation Bond (3-year term, bonding company accredited by the Insurance Commission) in low-risk cases, but this is a discretionary, case-to-case policy. Always confirm with the RD.
- Time limits – The obligation to release is not barred by prescription while the annotation exists; the encumbrance itself clouds the title indefinitely.
9. Estimated costs (₱, 2025)**
| Item | Low | High |
|---|---|---|
| Notarial fees (substitute release) | 600 | 2,000 |
| Documentary Stamp Tax | 200 | 1,500 |
| RD entry & annotation fees | 1,500 | 2,500 |
| Publication (court route) | 6,000 | 12,000 |
| Filing fees (RTC §108) | 2,200 | 4,500 |
| Counsel’s professional fees* | 25,000 | 80,000 |
*Lawyer’s fees vary widely; small-claims style petitions are permissible if the owner is personally handling the case.
10. Bottom-line checklist
- Confirm full payment (secure bank clearance).
- Try the administrative “substitute release” route first (Scenario A) — fastest and cheapest.
- If lender is unavailable or uncooperative, prepare for a §108 petition — gather payment proof, loss affidavit, demand letters.
- Once RD cancels the annotation, immediately obtain two Certified True Copies of the clean title — one for safekeeping and one for future transactions.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Laws, regulations, and RD practices may change; consult a Philippine lawyer or the Register of Deeds in your locality for case-specific guidance.