Quote Originally Posted by wowiesy View Post
so given na ipambabayad ay property sa pera na inutang... instead of going through foreclosure proceedings, kahit na may provision for extrajudicial foreclosure... dacion en pago pa rin.. pero the document title will be absolute deed of sale pa rin? hindi dacion en pago?
If you're property is worth 500 pesos and your loan is 100 pesos secured by a real estate mortgage on that property that has a provision for extrajudicial foreclosure, here is what can happen:

If you default, the bank may either foreclosure or accept your offer of dacion. It will all depend on the tax implication of the transactions. The bank might accept dacion of property worth 500 for a loan of 100. In that case, the real estate mortgage is cancelled. If bank will foreclose, the auction sale might attract another bidder say for 200 where the bank submitted a bid of only 100. In that case, the loan is paid where the bank gets back its 100, the owner/debtor gets 100 while the bidder gets 500 pesos worth of property for his 200 pesos.

If your loan is 200 and your property is worth 100, here is what can happen:

The bank might accept a partial dacion of 100 and still claim from you 100 pesos outstanding loan. But the bank will likely ask that you put up another security.

Or the bank might foreclose and bid 50 pesos for your 100 pesos property. If there's no other bidder, only 50 pesos of your loan gets paid leaving a balance of 150 pesos. And the bank gets your 100 peso worth of property. So you lose your property and are still indebted for 150.

It really depends. And there are a lot of permutations here. No general rule can be formulated.