The Supreme Court has tightened rules against the issuance of temporary restraining orders and writ of preliminary injunctions in connection with foreclosure of mortgages.
This means that courts are now enjoined to follow certain rules before it decides to issue restraining orders or preliminary injunctions against real estate mortgage foreclosures.
Last February 20, 2007, the Supreme Court adopted A.M. 99-10-05-O laying down the following rules:
First, No temporary restrianing order or writ of preliminary injunction against the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that the loan secured by the mortgage has been paid or is not delinquent unless the aplication is verified and supported by evidence of payment.
Second, No temporary restraining order or writ of preliminary injunction against the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that the interest on the loan is inconscionable, unless the debtor pays the mortgage at least twelve percent per annum interest on the principal obligation as stated in the application for foreclosure sale, which shall be updated monthly while the case is pending.
Third, Where a writ of preliminary injunction has been issued agasint a foreclosure of mortgage, the dispositiopn of hte case shall be speedily resolved. To this end, the court concerned shall submit to the Supreme Court through the Office of the Administrator, quarterly reports ont he progress of cases involving ten million pesos and above.
Fourth, All the requirements and restrictions prescribed for the isusance of a temporary restraining order/writ of preliminary injunction, such as the posting of a bond, which shall be equal to the amount of the outstanding debt, and the time limitation for its effectivity, shall apply as well to a status order.
These new rules take effect March 10, 2007.
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