Short answer. Yes. A mortgage stays fastened to the land itself, so selling it does not shake the bank loose. If the loan is not paid, the bank can foreclose on the property even though a new owner now holds it. The sale changed the owner, not the security.
What the law says
The mortgage directly and immediately subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation for whose security it was constituted.
Civil Code, Article 2126 — Mortgage Follows the Property. Read the full provision →
A mortgage runs with the land
The Civil Code says the mortgage directly and immediately subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation for whose security it was constituted. The phrase "whoever the possessor may be" is the whole answer. A registered mortgage is a real right that attaches to the thing, not merely a personal promise between borrower and bank. When the land passes to a buyer, it passes carrying that burden. The bank did not lend to the dirt; but it took the dirt as security, and that security follows the property into the hands of anyone who later acquires it.
What this means for the buyer
A person who buys mortgaged land steps into a position where the property can be sold at foreclosure if the underlying debt goes unpaid — even if that debt is not the buyer's own. This is why a registered mortgage is annotated on the title: it warns the world, and a buyer is treated as knowing what the title shows. Buying "subject to" a mortgage is legally different from the seller having cleared it. If the loan defaults, the buyer can lose the land to satisfy someone else's obligation, and is then left to chase the seller for the loss under their contract of sale.
The debt and the security are two separate things
Selling the land does not transfer the loan to the buyer unless the bank agrees to that. The original borrower usually remains personally liable to repay. So the bank effectively has two things it can pursue: the borrower, on the personal debt, and the property, through foreclosure, in whosever hands it sits. Foreclosure reaches only the value of the land; if that is not enough, a deficiency may still be claimed against the borrower under the loan terms. A buyer who wants real safety normally insists the seller pay off and cancel the mortgage, or arranges for the bank to release the property, before the price is handed over.
If foreclosure is looming
Whether you are the seller still on the hook, or the buyer facing loss of land you paid for, the documents decide a great deal: the mortgage deed, the annotation on the title, the deed of sale and any assumption arrangement the bank did or did not consent to. Gather them before matters harden. There are often narrow openings — settling arrears, questioning the foreclosure's regularity, or enforcing warranties in the sale — but they turn on specifics and timing. Take the papers to a lawyer early, because once a foreclosure sale is completed the room to act shrinks considerably.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Luzviminda Palo vs. Spouses Rey C. Baquirquir, G.R. No. 228919, August 23, 2023 — read the decision on LawPhil →
- New San Jose Builders, Inc. vs. Government Sevice Insurance System/Donardo S. Donato vs. Government, G.R. No. 200683 / G.R. No. 200710 / G.R. No. 201546 / G.R. No. 211512, July 28, 2021 — read the decision on LawPhil →
- Pablo P. Garcia vs. Yolanda Valdez Villar, G.R. No. 158891, June 27, 2012 — read the decision on LawPhil →
- Eufemia vda. De Agatep vs. Roberta L. Rodriguez, et al, G.R. No. 170540, October 28, 2009 — read the decision on LawPhil →