(Philippine legal and practical guide)

1) Overview

Foreclosed properties (also called “acquired assets,” “REO/ROPA,” or “QNP”—quietly negotiated properties) are real estate that a lender has taken after a borrower’s default. In Pangasinan, two of the most active sources are:

Pag-IBIG Fund (HDMF) — sells “acquired assets” via public bidding or negotiated sale.
Commercial and government banks — sell “ROPA” via auctions and broker-assisted negotiated sales.

Buying these assets can yield below-market prices, but due diligence is critical because sales are typically as-is, where-is.

2) Legal Framework You Should Know (Philippines)

Extrajudicial Foreclosure of Real Estate Mortgage — Act No. 3135 (as amended). Most residential foreclosures proceed here. After auction, the mortgagor has a one-year right of redemption counted from the registration of the certificate of sale with the Registry of Deeds. If the owner redeems, the buyer at auction must surrender the property and gets back the price plus allowed charges.
Judicial Foreclosure — Rule 68, Rules of Court. Foreclosure happens via court action; once the sale is confirmed, no redemption (only equity of redemption before confirmation).
Writ of Possession. A purchaser at an extrajudicial foreclosure sale (after title consolidation or lapse of redemption) may obtain a writ of possession ex parte; courts issue it as a ministerial duty, subject to limited exceptions (e.g., third-party claims).
Pag-IBIG Charter/Regulations. Pag-IBIG may dispose of acquired assets by sealed bidding or negotiated sale under its internal guidelines. These assets are post-foreclosure (title often already consolidated), so the statutory redemption period has usually lapsed—but always verify each property’s status.
Tax Regime (Buyer’s perspective).
- Documentary Stamp Tax (DST): effectively 1.5% of the higher of consideration or fair market value (FMV).
- Transfer Tax (local): typically up to ~0.5% of the higher of consideration or FMV in provinces (cities may be higher).
- Registration Fees: per Land Registration Authority (LRA) schedule.
- Value-Added Tax (VAT): may apply if the seller treats the property as an ordinary asset (common for institutions). Government sellers like Pag-IBIG often state whether VAT is “for buyer’s account, if applicable.”
- Capital Gains Tax (CGT) or Creditable Withholding Tax (CWT): legally the seller’s liability (CGT often 6% when the property is a capital asset to the seller). However, contracts sometimes shift economic burden—read the fine print.
- Unpaid Real Property Tax (RPT) and HOA dues: commonly for buyer’s account on “as-is” sales unless expressly waived.

Tip: Taxes are computed on the highest of: (i) contract price, (ii) BIR zonal value, or (iii) assessed fair market value in the tax declaration.

3) Where to Look in Pangasinan

A. Pag-IBIG Fund (HDMF) — “Acquired Assets”

What you’ll find: Houses and lots, vacant lots, and condo units across Pangasinan (e.g., Dagupan, Urdaneta, San Carlos, Lingayen, Alaminos).
How Pag-IBIG sells:
1. Public Auction / Sealed Bidding — Each tranche has a minimum bid price. Bidders submit an “Offer to Purchase” with a bid bond or cashier’s check. Highest responsive bid wins; ties may be resolved by draw lots or time-stamp rules (per the bulletin).
2. Negotiated Sale — Unsold assets move to negotiated sale at a posted floor price. First qualified offer at or above floor price usually wins.
Payment Options (typical):
- Cash (often with a small discount).
- Pag-IBIG Housing Loan (subject to membership and credit evaluation).
Buyer Costs: Listings typically say prices are net of VAT and other taxes/fees; buyer shoulders DST, transfer tax, registration, RPT arrears (if any), HOA dues, and VAT if applicable.
Documentation you’ll see/need:
- Property profile (TCT/CCT nos., lot/blk, area, improvements, occupancy status).
- Offer to Purchase form, valid IDs, TIN, proof of income (if using financing), Pag-IBIG MDF/number (you can enroll if not yet a member).
- If you win: award notice, Deed of Conditional Sale (for financed) or Deed of Absolute Sale (for cash), and turn-over docs.

B. Banks Active in Pangasinan

Most nationwide banks maintain foreclosed/ROPA portals and hold provincial auctions or negotiated sales covering Pangasinan. Common players include:

BDO, BPI, PNB, RCBC, UnionBank, Security Bank, PSBank, Maybank Philippines, China Bank, plus Land Bank and DBP, and selected thrift/rural banks with Pangasinan exposure.

How banks sell:

Negotiated Sales via in-house asset management groups or accredited brokers.
Auctions (live/online) with a published Reserve/Minimum Price.
Payment: Cash or bank financing (sometimes with promo rates/closing cost assistance).
Common terms: Strict as-is, where-is; buyer settles taxes/fees after sale; VAT may apply for bank-treated ordinary assets; possession delivered without warranties and subject to occupants, if any.

4) Step-by-Step Buying Roadmap (Pangasinan)

Step 1 — Shortlist and Pre-Screen

Collect listings from Pag-IBIG and banks: note TCT/CCT numbers, lot/blk, area, occupancy, minimum price, and sale mode (auction vs negotiated).
Ask for property disclosure sheets and any available photos or vicinity maps.

Step 2 — Title & Lien Checks

Visit the Registry of Deeds with the TCT/CCT number to obtain a Certified True Copy (CTC).
Review the Annotations (e.g., levy, lis pendens, adverse claim, right-of-way, mortgage, or rent restrictions).
Match the owner’s name, technical description, and area; verify tax declarations at the Assessor’s Office.

Step 3 — Physical Due Diligence

Site inspection: verify exact location, access roads, topography, flood susceptibility, encroachments, and condition of structures.
Occupancy: determine if vacant, owner-occupied, or by informal settlers/tenants. Occupied assets require post-sale possession work (see Section 6).
Utilities & HOA: check back bills and association rules.

Step 4 — Price and Tax Math

Compare minimum price vs. market comps in Dagupan, Urdaneta, San Carlos, Lingayen, etc.
Estimate closing costs:
- DST (~1.5%)
- Transfer tax (provincial rate)
- Registration fee (LRA schedule)
- VAT (if indicated/applicable)
- RPT arrears/penalties (if for buyer’s account)
- Notarial and incidental charges

Step 5 — Submit Offer / Bid

Pag-IBIG auction: follow the bulletin’s sealed bid mechanics and required bid bond and forms.
Bank sale: submit a Letter of Intent (LOI)/Offer to Purchase, attach IDs and buyer profile; negotiate price and who bears which taxes.

Step 6 — Award, Documentation, and Possession

Award & Contracts:
- Pag-IBIG: Notice of Award; Deed of Conditional Sale (if financed) or Deed of Absolute Sale (cash).
- Bank: Deed of Absolute Sale / Contract to Sell.
Tax Payments & Transfer: Pay DST, transfer tax, and registration; file with BIR and LRA/Registry of Deeds to transfer TCT/CCT to your name; secure new tax declaration.
Possession: If occupied and no voluntary turnover, coordinate with counsel for demand letters and, where applicable, petition for writ of possession (post-consolidation or upon conditions under Act 3135). Factor time and legal costs.

5) Special Issues to Watch

Redemption Period Risks. If you are buying at foreclosure auction (not a post-consolidation acquired asset), the previous owner can redeem within 1 year under Act 3135. If you are buying acquired assets from Pag-IBIG/banks (title already consolidated), this is usually no longer an issue, but verify the annotation history.
Tenancy/Occupancy.
- “As-is” sales mean ejectment risk is yours. Even with a writ of possession, third-party claims (e.g., bona fide tenants) can delay turnover.
- Budget for litigation and/or relocation assistance if needed.
VAT and Ordinary Asset Treatment.
- Banks often treat foreclosed inventory as ordinary assets, which can trigger 12% VAT. Your sample computation should include a VAT scenario.
Undisclosed Issues.
- Encroachments, right-of-way disputes, informal easements, boundary errors, unpermitted extensions—not covered by warranties in “as-is” sales.
Pricing Psychology.
- First auction tranches may have higher floors; unsold properties may move to negotiated sale at lower prices. Track cycles.

6) Sample Costing (Illustrative Only)

Assume a house & lot in Urdaneta with a negotiated price of ₱2,500,000, BIR zonal value of ₱2,600,000 (higher value prevails):

DST (1.5% of ₱2,600,000) → ₱39,000
Transfer Tax (say 0.5%) → ₱13,000
Registration Fee (approx., per LRA table) → ~₱8,000–₱12,000
VAT (12%) → ₱312,000 if applicable (ask seller; some sales are VAT-exempt or not VAT-applicable)
RPT arrears/HOA dues → check listing; assume ₱0–₱XX,XXX
Notarial/Incidental → ₱5,000–₱15,000

Clarify in writing which party bears VAT, CGT/CWT, and arrears before you sign.

7) Document Checklist

Government-issued ID(s) and TIN
Offer to Purchase / Bid Form (Pag-IBIG) or LOI/Offer (bank)
Bid bond / reservation fee (if required)
Proof of funds or income documents (if financing)
CTC of Title and Tax Declaration (from your independent verification)
RPT receipts and zonal value printout (for your computations)
SPA (if represented), duly notarized and apostilled if executed abroad
Marriage certificate (for conjugal property issues)
Pag-IBIG membership docs (if using Pag-IBIG loan)

8) Practical Strategy for Pangasinan Buyers

Map your target towns/cities (e.g., Dagupan, Calasiao, Lingayen, San Fabian, Urdaneta, San Carlos, Alaminos, Mangaldan). Commute times, flood maps, and commercial zoning matter.
Track multiple sources (Pag-IBIG + at least 4–5 banks). Properties reappear with price cuts.
Inspect early, bid late: Do physical checks well before auction dates; if it moves to negotiated sale, you’re ready.
Set a walk-away price. Add closing costs and possession risk premium.
Line up financing (Pag-IBIG housing loan or bank loan) before bidding to avoid forfeiting bid bonds or missing payment deadlines.
Engage a local surveyor and counsel for boundary checks and possession planning.
Document everything—offers, counteroffers, the seller’s undertakings on taxes and turnover.

9) Frequently Asked Questions

Q: Are Pag-IBIG prices final? A: Not always. In auctions, you must bid at or above the minimum. In negotiated sales, you can propose a price; success depends on the asset manager’s floor and competing offers.

Q: Can I use a Pag-IBIG loan to buy a Pag-IBIG acquired asset? A: Yes, subject to standard membership and credit checks, and the property’s eligibility.

Q: How fast can I get possession? A: Vacant assets: upon deed execution and turn-over. Occupied assets: expect additional time for amicable settlement or legal remedies (including writ of possession where applicable).

Q: Are titles clean? A: Institutions aim to deliver clean title, but annotations can remain (easements, prior liens). Always verify with the Registry of Deeds.

10) Clean Closing Checklist (Before You Pay in Full)

Written confirmation of which taxes/fees each party will shoulder
Latest CTC of Title with no adverse annotations that you cannot accept
Verified zonal value and tax declaration for accurate tax computations
Vacancy/turnover plan and timeline, or signed undertakings if any occupants
Exact computation of DST, transfer tax, VAT (if any), registration, and incidentals
For financing: approved loan and bank’s closing instructions
Ready-to-file BIR and LRA document set

11) One-Page Action Plan (Pangasinan)

Compile Pag-IBIG and bank Pangasinan listings.
Select 5–10 candidates; request disclosure sheets.
Pull CTC of TCT/CCT + tax dec; do site inspections.
Run price + closing cost scenarios (with and without VAT).
Choose auction or negotiated path; prepare bid/offer pack.
If awarded, execute deed, pay taxes, and transfer title.
Execute turnover/possession plan.

Final Note (Not Legal Advice)

This guide summarizes the Philippine legal context and common institutional practices for Pag-IBIG and bank foreclosures in Pangasinan. Because tax treatment, occupancy, and title particulars vary property-by-property, consult a local real estate lawyer and your tax adviser before committing funds.