Short answer. Yes. Article 2128 provides that the mortgage credit may be alienated or assigned to a third person, in whole or in part, with the formalities required by law. Your lender can transfer the loan and its mortgage to someone else, and your consent is not needed — though the transfer must follow the legal formalities.
What the law says
The mortgage credit may be alienated or assigned to a third person, in whole or in part, with the formalities required by law
Civil Code, Article 2128 — Assignment of the Mortgage Credit. Read the full provision →
A mortgage credit can change hands
A loan secured by a mortgage is an asset in the lender's hands, and like other credits it can be sold. Article 2128 says so plainly: The mortgage credit may be alienated or assigned to a third person, in whole or in part, with the formalities required by law. Your lender may transfer what you owe, together with the mortgage that secures it, to a bank, a financing company or any other person. The transfer can be complete or partial. What passes to the new holder is the creditor's position — the right to be paid and, if you default, the right to enforce the mortgage.
The security follows the debt
The mortgage is accessory to the credit, so it travels with it. When the credit is assigned, the assignee does not merely inherit a bare right to collect — he steps into the mortgage as well, gaining the same security over the property that the original lender held. This is why the article speaks of assigning the mortgage credit as a single thing. You do not end up owing one person while a different person holds the mortgage; the loan and the security that backs it move together into the hands of whoever takes the assignment.
Your consent is not required, but formalities are
As the debtor, you are not asked to approve the sale of your own loan — a creditor may generally assign his credit without the debtor's consent, and Article 2128 assumes as much. What the article does insist on is compliance with the formalities required by law. An assignment has to be made in the proper form, and where the mortgage is over registered land, recording the assignment is what makes it effective against third persons rather than merely between the parties. So the lender's freedom to assign is real, but it is exercised through the formalities the law attaches to it, not by a private handshake.
What changes for you, and what does not
For the borrower, an assignment changes who you pay, not what you owe. The terms of your loan and mortgage carry over unchanged; the assignee cannot enlarge them simply by having bought the credit. The practical point is to be sure of the transfer before you redirect payments: watch for notice that the credit has been assigned, and satisfy yourself that the person now demanding payment genuinely holds it, so that paying discharges your debt. Paying the wrong party because you accepted an unproven claim of assignment is the trap worth avoiding.
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.
- Heirs of Eduardo Manlapat vs. Hon. Court of Appeals, et al, G.R. No. 125585, June 8, 2005 — read the decision on LawPhil →
- Servicewide Specialists vs. Court of Appeals, et al, G.R. No. 116363, December 10, 1999 — read the decision on LawPhil →