Two. Lotto claims that the real estate mortgage that Go executed was void since it did not authorize her to execute the same and since DBS did not sign it. But Lotto admitted in its complaint below that Go had obtained a loan from DBS on its behalf, with the condominium unit as collateral. With this admission, Lotto should be deemed estopped from assailing the validity and due execution of that mortgage deed.
As to BPI’s right to foreclose, the records show that Lotto defaulted in its obligation when it unjustifiably stopped paying its amortizations after the first year. Consequently, there is no question that BPI (which succeeded DBS) had a clear right to foreclose on Lotto’s collateral. The Court held in Equitable PCI Bank, Inc. v. OJ-Mark Trading, Inc. that foreclosure is but a necessary consequence of non-payment of mortgage indebtedness. The creditor-mortgagee has the right to foreclose the mortgage, sell the property, and apply the proceeds of the sale to the satisfaction of the unpaid loan.
At any rate, not all is lost for Lotto. It could avail itself of lower interest where the prevailing market rate warrants. And, under Section 47 of the General Banking Law, it has the right to redeem the property by paying the amount due, with interest rate specified under the mortgage deed, as well as all the costs and expenses incurred by the bank.