Pag-IBIG Foreclosure Redemption in the Philippines

Your Complete Legal Guide to the Steps and Available Options (updated to June 2025)

Important Note — Not Legal Advice This article is for general information only and is not a substitute for individualized advice from a lawyer or from Pag-IBIG (Home Development Mutual Fund) itself. Laws, Pag-IBIG circulars, and internal guidelines change from time to time; always verify the most current rules before acting.

1. Legal Foundations

Source of Right	Key Provision	Practical Effect
Act No. 3135 (1924), as amended by Act 4118	§ 6 gives a mortgagor (and successors-in-interest) one (1) year from the date the Certificate of Sale (COS) is registered with the Registry of Deeds to redeem property sold at an extrajudicial foreclosure sale.	Governs almost every Pag-IBIG foreclosure because Pag-IBIG uses extrajudicial foreclosure under a Special Power of Attorney in the mortgage.
Republic Act 9679 (2009) – Pag-IBIG Charter	Authorizes Pag-IBIG to foreclose delinquent housing loans and to issue implementing rules (HDMF Circulars).	Pag-IBIG’s internal rules flesh out the mechanics, interest rate, penalties, and payment modes for redemption.
Civil Code, Art. 1619 (general right to redemption) & Rules of Court, Rule 68 (judicial foreclosure)	Very rarely apply, because Pag-IBIG seldom files judicial foreclosure. If it does, the one-year period is counted from confirmation of the sale.
BSP Memorandum & Maceda Law (RA 6552)	The Maceda Law protects buyers in installment sales directly with private developers, not borrowers under a Pag-IBIG mortgage. It is sometimes invoked by analogy but does not create a statutory right against Pag-IBIG.

2. Key Concepts and Time Lines

Milestone	Typical Calendar	What It Means
Default	When borrower is three (3) monthly amortizations in arrears.	Pag-IBIG issues a Notice of Default; penalties of 1/20 of 1 % per day may accrue.
90-Day Grace/Remedial Period	Counted from receipt of Notice of Default.	Borrower may: (a) update arrears, (b) apply for Restructuring (see § 5.2), or (c) execute Dacion en Pago.
Notice of Extrajudicial Sale (NES)	Mailed & posted after grace period lapses. Auction is set 30 days after first publication.	Sets the sale date; borrower still may settle in full or be allowed to restructure up to 1 day before auction.
Public Auction	Highest bidder (usually Pag-IBIG itself) wins; Certificate of Sale issued.	Redemption clock starts only when COS is registered (not auction date).
One-Year Statutory Redemption Period	§ 6, Act 3135.	Price = Bid Price + 12-month interest (usually HDMF’s housing loan rate) + taxes, HOA dues, plus Sheriff’s fees and registration costs.
Writ of Possession	Filed after the 1-year redemption lapses or upon consolidation if borrower waives redemption.	If granted, borrower will be physically ejected by the court sheriff.

3. Step-by-Step Redemption Process

3.1 Gather the Facts

Locate the COS – Ask Pag-IBIG for the Registry of Deeds (RD) entry number and the date of registration.
Compute Deadlines – Count one year exactly (e.g., COS registered 04 July 2024 → last day to redeem is 04 July 2025, 11:59 PM).

3.2 Request the Official Redemption Statement of Account (SOA)

*Issued by Pag-IBIG’s Recovery & Remedial Management Division (RRMD).* The SOA itemizes principal, interest, penalties, insurance, annotation, RD fees, and VAT. Processing takes 3–10 working days.

3.3 Pay the Redemption Price

Pag-IBIG accepts:

Cashier’s/Manager’s Check payable to Home Development Mutual Fund.
Short-Term Loan (STL) Offset – Your accumulated Total Accumulated Value (TAV) may be applied up to 60 % of the price.
Housing Loan Proceeds – Some members refinance with a fresh Pag-IBIG loan if they now qualify.

3.4 Execute the Deed of Redemption

Pag-IBIG prepares a notarized deed; borrower signs, then Pag-IBIG signs as vendor. Documentary Stamp Tax (DST) is ₱ 15.00 per ₱1,000 of the consideration or fair market value, whichever is higher.

3.5 Register & Annotate

Registry of Deeds – Present: (a) COS, (b) Deed of Redemption, (c) BIR-stamped DST, (d) real-property tax clearance.
Pay RD fees (~₱6,000–20,000 depending on property value).
RD cancels the COS annotation and restores original Transfer Certificate of Title (TCT) to borrower’s name.

3.6 Notify Courts/Sheriff (if Writ already issued)

File a Manifestation and attach RD-certified copy of the annotated title; ask that the writ be considered satisfied.

4. How the Price Is Computed

$\text{Redemption Price} = \text{Bid Price at Auction} ;+; \underbrace{\bigl(\text{Bid Price} \times r \times t\bigr)}_{\text{Interest}} + \text{Incidental Costs}$

Bid Price – Usually equal to total outstanding loan + interests + penalties as of auction date.
r – Pag-IBIG’s prevailing interest (currently 6%–8% p.a. for socialized to mid-range housing).
t – Fraction of a year (exact number of days from COS registration to redemption payment).
Incidental Costs – Publication, sheriff’s fees, RD fees, property taxes advanced by Pag-IBIG, condo/HOA dues.

Tip: Ask the RRMD for the final daily‐accruing interest figure so you can pay to the exact date and avoid repeat trips.

5. Alternatives When You Cannot Pay the Full Redemption Price

5.1 Reinstatement Before Auction

When: Up to 1 day before auction.
How: Pay all arrears + penalties + legal costs only (not the bid price).
Effect: Foreclosure proceedings are withdrawn; original loan continues.

5.2 Loan Restructuring (Pag-IBIG Circular No. 472, effective 2024)

Up to 18 months after default or within the 90-day remedial period whichever is longer so long as no COS has been registered.
Maximum term: Remaining economic life of the collateral or 30 years, whichever is shorter.
Penalties: Fully condoned upon approval; interest may be re-priced.

5.3 Dación en Pago (Payment in Kind)

You voluntarily convey the property back to Pag-IBIG in exchange for full settlement.
Benefits: Stops interest and penalties, preserves credit history, may allow you to rent the property under Pag-IBIG Rent-to-Own (RTO).

5.4 Mortgage Redemption by Third Party

A family member or investor redeems in their own name (allowed if your SPA grants the right).
Third-party redemption does not require borrower’s consent during the redemption period.

5.5 Buy-Back After Consolidation

Even after the 1-year period, Pag-IBIG may sell the acquired asset back to the former borrower under its Acquired Assets Disposal Program. Terms: 10 % down-payment; balance payable up to 30 years at regular HDMF rates.

6. Consequences of Non-Redemption

Consolidation of Ownership – Pag-IBIG or the winning bidder registers an Affidavit of Consolidation; TCT is transferred out of your name.
Issuance of a Writ of Possession – Ex parte petition; sheriff enforces ejectment.
Deficiency Claim – Pag-IBIG rarely pursues if bid price covered the debt, but it is legally possible within 10 years (Art. 1144, Civil Code).
Credit Rating Impact – Negative record in both Pag-IBIG’s internal system and CIC (Credit Information Corp.) database for up to 10 years.

7. Practical Tips & Common Pitfalls

Do’s	Don’ts
Verify the COS date yourself at the RD; errors in counting the 1-year period are fatal.	Don’t wait for Pag-IBIG to call; after auction, they seldom chase borrowers.
Record every payment and keep official Pag-IBIG receipts; courts require proof.	Don’t pay agents in cash; only Pag-IBIG cashiers or partner banks.
Consult a lawyer early; procedural mistakes (e.g., wrong check payee) void redemption.	Don’t rely on verbal extensions; any grace must be in writing by Pag-IBIG.

8. Frequently Asked Questions

Can I redeem if I already signed a Quitclaim? Unlikely. A quitclaim is usually treated as a waiver of redemption. You need to challenge it for vitiated consent.
Is the one-year period extendible? Only through a written waiver by the buyer, which Pag-IBIG almost never gives.
Can I live in the property during the redemption period? Yes, possession stays with the borrower until the writ of possession issues.
Are bank funding or Pag-IBIG loans allowed to redeem a Pag-IBIG foreclosure? Pag-IBIG itself allows internal refinancing; private banks will rarely lend on already foreclosed collateral.
What if Pag-IBIG itself was the highest bidder? Your right is the same: redeem from Pag-IBIG within the statutory year at the bid price plus interest.

9. Checklist Before You Go to Pag-IBIG

Government-issued ID(s) × 2
Latest SOA (valid for 7 days)
Cashier’s check(s) or proof of fund transfer
SPA or Board Resolution (if signing for a corporation)
BIR Form 2000 with DST payment (after deed preparation)
Real property tax & HOA clearance
Two photocopies of TCT/CCT, Tax Declaration

10. Conclusion

The one-year statutory redemption period under Act 3135 remains your strongest legal lifeline after a Pag-IBIG foreclosure, but invoking it is strictly procedural and deadline-driven. If you foresee difficulty raising the full redemption price:

Act during the 90-day remedial window while reinstatement or restructuring are still on the table.
Explore alternatives like dación en pago or acquired-asset buy-back rather than passively awaiting eviction.
Maintain open communication with Pag-IBIG RRMD; the Fund’s charter encourages loss-mitigating relief but puts the burden of initiative on the borrower.

When in doubt, consult a housing-law practitioner; a timely legal move can spell the difference between losing and saving your home.

Prepared by: Atty. [Your Name] Housing & Real Estate Practitioner, Integrated Bar of the Philippines