Foreclosure Properties — To Buy Or Not To Buy? (Part 2 of 2)

This is the second of a two-part article series on Pag-IBIG Foreclosure. Here we’ll talk about why foreclosure happens and some useful tips on buying foreclosure properties, more specifically, Pag-IBIG foreclosed properties.

(In case you missed Part 1, follow this link.)

Why Foreclosure Happens?

There are endless reasons why foreclosures occur, but basically they all boil down to the following categories.

1. Property Problems. This is perhaps the biggest reason why Pag-IBIG Foreclosures abound. We all know that a lot of Pag-IBIG accredited projects are low cost (read: low-budget) and this leads the developers to resorting to all kinds of dirty tricks just to recover the cost of doing the project.

In Pag-IBIG Subdivisions with high foreclosure rate, it is not uncommon to see the following:

  1. Half-cemented road. You may think they are leave the other half for the next election, but the reality it, the politicians have nothing to do with the project.
  2. Weak structures, sub-standard materials. Houses whose walls are not supported by cables or back doors that are so easy to break any grade school level Karate Kid can do it.
  3. Flooded area. These happen to projects done by fly-by-night developers, the kind of developers who should not be developing subdivisions in the first place.

The list could go on.

Can you blame the buyers if suddenly they stop paying the amortizations and allow the foreclosure clock to just tick? These are reasons enough not to buy in these places even if you see a good deal.

stop pag-ibig fund foreclosure

2. Personal Reasons. People change. Their situations also change. From changing careers to migrating to another country and all else in between, some of life events could drastically affect one’s decision on whether to continue with the property or just let it go.

3. Financial Problems . The money matters no one dares to talk about… until it’s too late.

  1. Disease — We Filipinos are so used to the familiar phrase, “Bawal magkasakit.” It doesn’t require a rocket scientist to figure out that getting sick and being hospitalized for a longer time is really expensive.
  2. Death – If disease is already expensive, death is even more so.
  3. Divorce – Good news: We don’t have divorce here in the Philippines. Bad news: We do have our own strange ways of breaking up a relationship (which should not be made in the first place). Yes, we do break up only after several black eyes are already obvious. Funny huh? Wait until you see what happens to the couple’s real property, which by the way is considered conjugal property

As you can see there are many things and events that could possibly lead to a foreclosure. Therein also lies the problems and opportunities of foreclosure properties.

To Buy Or Not To Buy?

Unfortunately, there is no single best answer. If you know what you are doing and you get lucky enough in choosing a foreclosure property to buy, then good for you. One of the factors foreclosure properties are drawing a lot of interests from buyers, investors and speculators is that their prices appear so very cheap.

However, don’t be misled by the cheap price tag that comes with the property. That Foreclosure property you’re eyeing to buy may contain a bag full of tricks that may not be obvious at first. Always do your homework when considering foreclosure properties.

The following tips should serve as your handy and useful guide when buying a foreclosure.

  1. Uncover the reason of the foreclosure. If possible, meet the owner during the pre-foreclosure stage. You may not get an honest reply, but there are a lot of things you will discover during the conversation.
  2. Get the numbers and do the math. How much is the outstanding balance? What is the monthly amortization? How much was paid so far? What is the selling price? It should be negotiable.
  3. Take a look at the property. Get a second look. Then finally, a third look. Never rely on the map, or the photos or the descriptions of the property. In other words, don’t trust what you are seeing unless it is the property itself. Do some leg work. This process alone is already a potential source of stress, but you have to be aware that this is part of the cheap price you are paying. One of the disadvantages of foreclosure homes is that it is very difficult to inspect what’s inside the house especially if there are still occupants living in the house.

And most importantly, don’t do it alone. Always have a competent lawyer by your side to help you along the way.

Part 2 of Foreclosure Properties — To Buy Or Not To Buy? is written by Carlos Velasco.

  • ofelia dela cruz

    Hi,nakatanggap ako ng final notice sa pag-ibig, after this ba ay for foreclosure na ang property ko and naghuhulog namna ko monthly with interst and catching for the months na naiwan ko coz i got separated. my sister is planning to get my property and she applied for loan last feb.. pero sabi sa offine sa august pa sya pede magloan pero advance namn ang contribution nya up to 2012.ano po ang dapat kong gawin sa problema ko na ito..salamat po..

  • elaine

    Hi po,Good Day! gusto ko lng po sana mag inquire kasi po Pag Ibig member po ako since 2008 kaso po di ko na po nahulugan mag 3 years na po this coming september.OFW po ako dito sa Saudi gusto ko sana ituloy ang hulog so that pag uwi ko maka loan ako.thanks po

  • semiramis gonzales billones

    i’m looking for foreclosed house in san pedro or nearby areas. my husband has already availed of a housing loan and has paid already 15 years of the 25 years loan.

    can i also make a new housing loan? tnx

  • http://www.pagibigfinancing.com admin

    @semiramis:
    As to the foreclosed properties, please inquire at the branch. You are allowed another housing loan if the first one is already fully paid.

    @ofelia:
    I hope you already checked the status of the unit at the Pag-IBIG office.

  • Jherd

    to the Pag Ibig admin :
    dear sir, my father aquired a housing loan through pagibig in the 1980’s. our last up dated payment is last 20031.. My father died last 2008. now I want to pay all the remaining balance payment including the interest. Pag ibig gave me the assesment of how much were going to pay… can we apply for re-construction of payment since the principle borrower which is my father is already dead.. we want to lessen the payment as much as possible & settle all our balance.. Moreover, is it possible to transfer the Pag ibig membership of my father to me.. so that I can avail another programme for my family.. thanks and have a nice day

  • http://www.pagibigfinancing.com admin

    @Jherd:
    Please inquire from them again if you can possess that property since your father already died. Oh, sorry… If he was prompt in his payments, you as beneficiary should be able to take possession of the property.

  • jen bernabe

    good day. interested ako bumili ng forclosed na lot sa pag ibig. Di ko pa nagagamit ang pag ibig loan ko. Just in case na may nahanap ako na lot at babayaran ko muna ay half the price tapos the rest eh sa pagibig loan na. Pwede ba ako mag loan sa pagibig kahit may binabayan pa akong loan sa bank? pls reply. thanks

  • Mariesue

    Hello, Pag ibig mortgage office: ilang buwan na hindi makabayad bago maforclosed ang bahay at lupa? 4 months sa end of December 2011 na wala bayadbayad at gusto ibenta pero wala namang bibili dahil sa daming house and lot na forsale around Bacolod at dahil nag boom ang real estate ng bacolod City at ang mga tao namimili sa lugar na its worth their money when buying a house, location, security, neighborhood, surroundings are also the factors when buying a house and lot.

  • http://www.pagibigfinancing.com admin

    @Mariesue:
    Just 3 months of missed payments and it is already a candidate for foreclosure.

    @jen:
    That depends on your negotiations with the seller. And as to the second question, the answer is Yes.

  • Anna

    Hello Pag-ibig Admin!We apply housing sa developer and we paid the contract which is downpayment or mortage insurance however they told us lately that we will directly process sa pag-ibig so I just wondering bakit kami ang dapat magprocess. so, i ask if how’s the status sa house kasi they always told us na buyback daw. so nagresearch po ako then i read about foreclosure properties. And then i ask them again kung foreclosure na ba itong bahay sabi nila yes. So yung very concerned ko po talaga mam/sir:
    Do they refund us the insurance mortage or downpayment that we paid since it’s foreclosure status or kailangan bayaran yun which is we paid na? I hate kasi because they won’t tell us na it’s foreclosure, they always say na buyback and we have to wait daw.

    thanks

  • jaime llorca

    admin, meron po akong updated housing loan. seventeen years ko na po sya binabayaran, peo nbibigatan na po ako bayaran sya wala naman po tumitira, nabulok na po yun unit. kya di ko mabenta. oag foreclosed po ba tu. may mkukuha ba ko sort of reimbursement pag naibenta uli ng pagibig yun unit ko?

  • http://google gladys

    good day!admin.gusto ko po malaman ano ang dapat kung gawin.nakabuy po ako house at rights lang po.na inform po ako ng may ari n mtagal n silang di ngbabayad ng amort nila.pero binili ko pa rin po ang rights nya.eto po ung prob. dumating na po ang foreclosure ng house at my offer loan restructuring.pwede ko po ba ma avail yon?kahit third owner n ako?
    and if mataas po magiging monthly o ung balance n babayaran ko pwede po ba na hintayin ko n lang na mapunta sa asset ninyo o ng pag-ibig etong unit?ano po ang kylangan kung gawin para ma sure ko na pwede ako ang bumili nito sa pag -ibig?active member naman po kami ng asawa ko.tama po ba na kami ang magiging principal buyer?yon po ang sinabi ng may ari sa amin bago namin bilihin ang rights.salamat po

  • http://www.pagibigfinancing.com admin

    @gladys:
    You really have a big problem with that one. Did you consult this case at the branch? It could be that you are not recognized by Pag-IBIG as the third owner. Please verify it first.

    @jaime:
    Once your property is foreclosed, that means you have failed on your obligations with your mortgage. And Pag-IBIG has the right to take the property from your possession. Sorry, but
    Pag-IBIG don’t give out payments to foreclosed accounts.

    @Anna:
    Please coordinate with them because I can’t comment on this due to incomplete information.

    It would also help if you review the documents that you have signed with them.

  • http://www.pagibigfund.gov.ph teresita a. olmella

    sir/madam ask ko lang po kung kanino ako lalapit na div. kasi nakabili po ako ng foreclosed property im the 2nd owner at binayaran ko na po for one year sa developer at naka register sa name ko nagkaproblema sa kapitbahay na nasa likod ko kasi walw syang alolod lahat ng tubig pag umulansa loob ng bahay ko kaya kinausap ko dapat alolod sa loob ng bahay pero nagalit kaya nilapit ko sa devloper engineer para cla kumausap it takes 3 monhts wala ganon pa rin nagsawa ako so sinabi ko sa agent kilala ng devloper na ibenta na lang sa iba ayaw ko nang gulo in short may nakabili sya na ang magassume ng bayad sa pagibig ibinalik ang hinulog k pero ang problem ay ako pa rin ang nakapangalan sa assessors ofc gusto ko ma clear ang name ko na di ako ang owner na since dec 2009 ngayon kanino ako lalapit sa pagibig to solve the problem thanks and more power.

  • delia l.cruz

    Sir/madam.. ako ay may unit sa Sunnybroke elang gen trias..sec.1blk19 lot 8 at katabi ko po ang sa ank ko na si Elaine L.Cruz lot 6 nman po ang unit nya.. Noong last feb.7 nagpunta po ako sa Pag-big office para alamin ang stutus ng aming mga units at nagpunta na po ako sa forclosure division .. Nagtanong po ako doon kay Mrs.Baby Aquino Fernando kung puede pa pong mapa re structure namin ang aming units kasi nga po medyo di namin nahulugan ang aming units .Ayon po kay Mrs.Baby A.Fernando maghanda ako ng halagang sinabi nya at iayos ko ang mga requirements para sa pagparestructure..so sa katunayan andon pa ang aking pangalan at sa anak ko. Nagtataka lang po ako na kanina may pumunta sa Sunny broke na naghatid ng sulat galing daw sa Pagibig at ang nakalagay sa sulat ay iba na ang pangalan ng aking unit at sa anak ko sa Sec.1 Blk,19 lot 6 & 8 nakapangalan kay Anna May Ablaza at ang sulat ay galing sa pag-ibig at ang nilalaman ng sulat ay pinavavacate within 15 days..yong nakatira sa unit ko at sa anak ko na aming kamag anak..Kaya nakapagtataka po na paanong nangyari yon na ang dalwang units namin ay mapaunta sa isang name lang ..at ang nakalagay sa sulat ay galing kay Ms.Yolanda M.Borbado.head unit .ano po kaya ang dapat kung gawin para malamn ko kung ano na po ang nangyari talaga at bakit napaka bilis naman na maging mapasa ibang name ang dalawang units namin ?sana po masagot nyo ang aking mga katanungan …marami pong salamat…gumagalang ..Mrs.Delia L.Cruz

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  • kobe

    Sir gud am ask kolng po ano pa gagawin namin sa, sa ngaun po kasi nag assume kmi ng housing loan pero 2nd na po kami nag assume sa bahay,ang tunay na may ari talga indi na po namin mahagilap,sa ngaun po nababahala po kc kami baka biglang ma bidding ang bahay.last week pomunta po ako sa Pag-ibig Office ang sabi sa akin antayin ko dw na ma registered ang bahay for redemption, ang nakalagay na monthly amortization po 2,800 last payment po last May 2004.magkano kaya ang mababayaran po namin sa redemtion?kng mababayaran po ba nmin considered na po ba sa main na ang bahay?sana po mabigyan nyo po ako ng payo para po maliwanagan po ako..maraming salalamt po..sana marami pa kau matulong..More power & GOD BLESS po…

  • http://www.pagibigfinancing.com admin

    @kobe:
    This one is very complicated since the property is still not yet in your account and you can’t even trace the original owner. Please ask again the assistance of the Pag-IBIG Staff there in your place and give you the real status of the unit.

    @delia:
    Sorry for the late reply. But this kind of problem should be refered to the branch handling your account.

    @teresita:
    Please refer your problem to the developer or your community.

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    • lina del mundo

      my sister-inlaw and her husband had purchased a foreclosed property through her husband’s brother not knowing the problems they will encounter. they paid in cash but up to now, the properties are not yet transferred to them. the following problems are: 1) unpaid real property tax for the lot from 1998 and from 2004 for the house. 2) unpaid capital gain tax from the developer to pag-ibig from april 17/96 to 02/26/10. plus penalty amounting to 145,000+ based on the computation of the bir. there were also assume sales prior to the purchases made by couple. the bir said the couple should run after the pag-ibig but how? we are at a lost knowing the sum of money they have spent for these properties. could the fund help the couple what to do to ease the burden they are in now?

  • liz

    Sir/Madam: may kapatid po kasi ang father ko besides our house. yung titulo po namin ay nabawasan ng 2 meters right of way, yung kanila hindi. supposed to be po dapat tig isang metro lang ang dapat na ibigay na right of way. Umapela po kami sa kanila na ayusin ulit yung titulo nila kasi po para maibenta namin yung sa father ko. Nalaman po namin na nakaloan at nasa pagibig daw po ang titulo nila. sabi po ng surveyor dapat mailabans nila yung originaL TITLE para masukat ng panibago. ano po ang gagawin namin, kasi baka po di nila matubos o mahiram ulit yung titulo sa pag-ibig. naawa na po ako sa father ko, ang tagal na pong problema ng pamilya namin yung pagpapasukat ng bago. kasi po dati ayaw nilang pumayag, kaya pala ay dahil sa nasa pag-ibig yung title nila. sana po ay matugunan nyo ang aking mga tanung. salamat po. god bless.

  • jerry

    hi pag ibig admin., ask ko lang po kung my website pba kau kung saan my list kau ng mga foreclose n house & lot?/property? san po kya pwede mkakuha ng list of foreclose property? thanks po.,

  • angie macarilay

    bakit po ang hirap marelease ng loan sa pag-ibig? dami kailangan na papel? tapos pag andyan na mga papel tagal pa rin marelease ng tseke, kasi yun mga pipirma daw sa tseke puro wala…!