BIR Ruling No. 054-83

April 5, 1983 BIR RULING NO. 054-83 Gentlemen : This refers to your letter dated August 26, 1982 requesting opinion as to whether Union Bank of the Philippines can avail of the procedure prescribed by Revenue Memorandum Order No. 33-81 in consolidating titles to the foreclosed properties assigned to it; and whether financing institutions are covered by Revenue Memorandum Order No. 33-81. It is represented that on August 20, 1981, a Deed of Assignment with Assumption of Liabilities was executed by Bancom Development Corporation (BDC), Bancom Finance Corporation (BFC) and First Countryside Credit Corporation (FCCC) in favor of Union Savings and Mortgage Bank, now Union Bank of the Philippines (UBP), whereby BDC, BFC and FCCC assigned all their respective assets, rights and interest in favor of UBP; that BDC, BFC and FCCC are all financing institutions engaged in lending money; that in the course of their business, BDC, BFC and FCCC accepted real estate mortgages (RFM) as collaterals to the loans they granted to their respective clients; that for failure of said clients to pay the loans, these institutions foreclosed their real estate mortgages, but without consolidating title to the said real property; BDC, BFC and FCCC assigned all their respective assets, rights and interests including those of the foreclosed properties in favor of UBP; hence, UBP as Assignee has initiated efforts to consolidate the titles and transfer the title to the foreclosed properties in UBP's name. In reply thereto, I have the honor to inform you that under Revenue Memorandum Order No. 33-81 dated Nov. 19, 1981, the Bureau of Internal Revenue allows the issuance of certification authorizing the transfer of title to real property acquired by banks through foreclosure sale. This procedure may be availed of in this particular instance where the original mortgagees which foreclosed the mortgages are finance companies and which assigned their rights and interests to that Bank. In other words, that Bank may avail of the said procedure as if it was the party acquiring the property through foreclosure sales, provided that it complies with the requirement prescribed by said Revenue Memorandum Order. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue