I. Nature of Pag-IBIG Foreclosure and Applicable Law

Pag-IBIG Fund (Home Development Mutual Fund) foreclosures of housing loans are conducted extrajudicially pursuant to Act No. 3135, as amended, in conjunction with Republic Act No. 9679 (Pag-IBIG Fund Law of 2009) and the provisions of the housing loan mortgage contract.

Pag-IBIG Fund is not a banking institution governed by Republic Act No. 8791 (General Banking Law of 2000). Therefore, the special rule in Section 47 of RA 8791 limiting the redemption period of juridical persons to “not later than the registration of the certificate of sale, which in no case shall be more than three (3) months after foreclosure” does not apply to Pag-IBIG foreclosures.

Consequently, the general rule on redemption in extrajudicial foreclosures applies in full to both natural and juridical persons whose properties are foreclosed by Pag-IBIG Fund.

II. The Redemption Period

The mortgagor (borrower/member) or his/her successor-in-interest has one (1) year within which to redeem the foreclosed property.

The one-year period is reckoned from the date of registration of the Certificate of Sale with the Register of Deeds (not from the date of the auction sale itself).

This is the consistent ruling of the Supreme Court in a long line of cases (e.g., G.R. No. 205554, Goldenway Merchandising Corporation v. Equitable PCI Bank; G.R. No. 177603, Metropolitan Bank & Trust Company v. Tan; G.R. No. 210909, Spouses Abad v. Far East Bank & Trust Company, etc.).

Pag-IBIG Fund itself follows this rule in its foreclosure guidelines and circulars.

III. Who May Exercise the Right of Redemption

The mortgagor/borrower (Pag-IBIG member)
His/her heirs or successors-in-interest
Any person having a lien or interest subordinate to the mortgage (junior encumbrancers)
Judgment creditors of the mortgagor who acquired their lien after the mortgage

A third-party highest bidder at the auction may also be redeemed from.

IV. Amount Required to Redeem

The redeeming party must pay:

The amount of the winning bid at the public auction (in Pag-IBIG cases, almost always the total indebtedness plus foreclosure expenses, because Pag-IBIG bids the full amount due);
Interest at the rate of one percent (1%) per month on the bid amount computed from the date of the auction sale until the date of redemption;
All expenses incurred by the purchaser (Pag-IBIG or third-party bidder) for the preservation of the property;
Real property taxes and special assessments, if any, paid by the purchaser after the auction, plus interest at the legal rate;
Any additional costs allowed by law.

Pag-IBIG Fund normally accepts redemption payments in cash or manager’s check. Installment redemption is not allowed unless Pag-IBIG expressly agrees in writing (which is extremely rare after auction).

V. Procedure for Redemption

The redeeming party must manifest in writing to Pag-IBIG Fund (Acquired Assets Sector or the concerned branch) his/her intention to redeem and tender payment within the one-year period.
Pag-IBIG computes the updated redemption price.
Upon full payment, Pag-IBIG executes a Certificate of Redemption, which is annotated on the Certificate of Sale at the back of the title.
The Register of Deeds cancels the Certificate of Sale upon presentation of the Certificate of Redemption.
The original owner regains full ownership; the mortgage is considered extinguished only if the redemption price covers the full loan obligation plus costs.

If the redemption is made before consolidation of title in Pag-IBIG’s name, the owner gets the property back with the mortgage already foreclosed but the loan account is considered settled by the redemption payment.

VI. Effect of Expiration of the Redemption Period Without Redemption

Upon the lapse of the one-year period without valid redemption:

Pag-IBIG Fund (or the third-party purchaser) becomes the absolute owner.
The Register of Deeds consolidates the title in the name of Pag-IBIG Fund or the third-party bidder.
A new Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) is issued in the name of the new owner, free from all liens and encumbrances except those annotated or those that survive by law (e.g., Section 4, Rule 39 easements, etc.).

Once title is consolidated, the former owner permanently loses the right of legal redemption.

VII. Rights of Former Owners After Consolidation of Title (No More Legal Redemption, But Possible Repurchase or Buy-Back)

After consolidation, the property becomes an “acquired asset” of Pag-IBIG Fund.

At this stage, there is no more statutory right of redemption.

However, Pag-IBIG Fund has administrative policies that give preferential treatment to former owners:

Priority to Buy Back – In public bidding or negotiated sale of acquired assets, the former registered owner is often given the first option or priority to match the highest bid or to purchase at the listed price.
Installment Buy-Back Program – Pag-IBIG sometimes allows former owners to repurchase the property under a new housing loan (subject to re-qualification and approval). This is called the “Affordable Housing Program for Former Owners” or similar programs under various circulars (e.g., Circular Nos. 428, 445, etc.).
The repurchase price is the current fair market value or the listed price of the acquired asset, not the old foreclosure bid amount.

These are purely administrative grace privileges, not legal rights. Pag-IBIG may discontinue or modify them at any time.

VIII. Special Cases and Notable Supreme Court Rulings Applicable to Pag-IBIG Foreclosures

Redemption period is jurisdictional and cannot be extended by agreement or estoppel except in very rare cases of fraud or bad faith by the purchaser.
Tender of payment is not necessary if the purchaser (Pag-IBIG) refuses to accept or makes redemption impossible.
Partial redemption is not allowed; the entire property must be redeemed.
If there are multiple properties foreclosed under one mortgage or separate mortgages, each property has its own separate redemption price and period.
The one-year period is counted in calendar days, not judicial days.

IX. Practical Tips for Borrowers Facing Pag-IBIG Foreclosure

Monitor the date of registration of the Certificate of Sale (you can request a copy from Pag-IBIG or the Registry of Deeds).
Redeem as early as possible because interest at 1% per month accumulates quickly.
If you cannot redeem within one year, immediately express interest in the buy-back or priority purchase program of Pag-IBIG Acquired Assets Sector.
Seek restructuring or dacion en pago before the auction, as these options disappear once the property is sold at public auction.

In summary, in Pag-IBIG Fund extrajudicial foreclosures, the mortgagor enjoys the full one-year redemption period from the date of registration of the Certificate of Sale — a more favorable rule than the truncated period imposed on juridical persons in bank foreclosures. Once that period lapses without redemption, however, the right is irrevocably lost, and only Pag-IBIG’s discretionary repurchase programs remain available to the former owner.