Banks and other Financial Institutions

Developmental Loan – All developmental loans from banks and other financial institutions, where the subdivision/condominium is constituted as its collateral, shall be subject of a mortgage clearance from the HLURB pursuant to Section 18 of PD 957, Subdivision and Condominium Buyers Protective Decree, Thus.

“Section 18. Mortgages. – No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Authority now the HLURB under EO 648. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof.”