Mortgage Loan Assumption Agreement for Philippines

Mortgage Loan Assumption Agreement Template for Philippines

A legal document governed by Philippine law that facilitates the transfer of mortgage loan obligations from an original borrower to an assuming party. This agreement outlines the terms and conditions under which the new borrower takes over the existing mortgage loan, including payment obligations, security arrangements, and compliance requirements. The document ensures compliance with Philippine banking regulations, property laws, and consumer protection requirements while protecting the interests of all parties involved in the transaction. It includes detailed provisions for loan assumption, continuing obligations, default scenarios, and remedies available under Philippine jurisdiction.

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What is a Mortgage Loan Assumption Agreement?

The Mortgage Loan Assumption Agreement is a crucial legal instrument in Philippine real estate and banking transactions that enables the transfer of mortgage obligations from one party to another. This document becomes necessary when a property buyer wishes to assume the existing mortgage of the seller, or when there's a need to transfer loan obligations to a different borrower while maintaining the original loan's security. The agreement must comply with Philippine banking regulations, the Civil Code, and relevant property laws, including the Real Estate Service Act and the Maceda Law. It typically includes comprehensive details about the original loan, property specifications, payment terms, and the assuming party's obligations. The document protects all parties' interests by clearly defining rights, responsibilities, and remedies while ensuring proper documentation for regulatory compliance and property registration purposes.

What sections should be included in a Mortgage Loan Assumption Agreement?

1. Parties: Identifies all parties to the agreement: Original Borrower (Assignor), Assuming Party (Assignee), and Original Lender

2. Background: Describes the original mortgage loan, property details, and circumstances leading to the assumption

3. Definitions: Defines key terms used throughout the agreement

4. Loan Assumption: Details the terms and conditions of the loan assumption, including the principal amount being assumed

5. Representations and Warranties: Statements of fact and guarantees by both the original borrower and assuming party

6. Rights and Obligations: Outlines the rights and responsibilities of each party after the assumption

7. Payment Terms: Specifies the payment schedule, interest rate, and method of payment

8. Security Continuation: Confirms the continuation of the original mortgage security and any additional security requirements

9. Default and Remedies: Describes events of default and the lender's remedies

10. Governing Law and Jurisdiction: Specifies that Philippine law governs the agreement and establishes jurisdiction for disputes

11. Notices: Details how formal communications between parties should be made

12. Execution: Signature blocks and notarization requirements

What sections are optional to include in a Mortgage Loan Assumption Agreement?

1. Co-Borrower Provisions: Required when there are co-borrowers involved in the original loan or assumption

2. Additional Security: Used when additional collateral or security is required for the assumption

3. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required

4. Property Management: Include when there are specific requirements for maintaining or managing the mortgaged property

5. Guarantor Provisions: Required when there are third-party guarantors for the assumed loan

6. Special Payment Arrangements: Used when there are non-standard payment terms or arrangements

What schedules should be included in a Mortgage Loan Assumption Agreement?

1. Schedule A - Property Description: Detailed legal description of the mortgaged property

2. Schedule B - Original Loan Details: Copy or summary of the original loan agreement and terms

3. Schedule C - Payment Schedule: Detailed amortization schedule for the assumed loan

4. Schedule D - Outstanding Balance Statement: Current loan balance and any arrears at the time of assumption

5. Schedule E - Required Documents: List of documents required for the assumption process

6. Appendix 1 - Consent Forms: Required consent forms from the original lender and other relevant parties

7. Appendix 2 - Property Documents: Copies of property title and other relevant property documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Genie AI

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking

Real Estate

Financial Services

Mortgage Lending

Property Development

Legal Services

Housing Finance

Construction

Relevant Teams

Legal

Real Estate

Mortgage Operations

Credit Risk

Compliance

Property Management

Loan Processing

Documentation

Customer Service

Risk Management

Relevant Roles

Mortgage Officer

Loan Officer

Real Estate Attorney

Property Lawyer

Banking Compliance Officer

Real Estate Broker

Property Manager

Credit Risk Manager

Legal Counsel

Bank Manager

Real Estate Developer

Mortgage Underwriter

Property Assessor

Financial Advisor

Documentation Specialist

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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