ALMOST LOSING PHP 4 BILLION

In the 1990s, Mrs. Mapera lent money to a distressed property owner and received the title of the property as collateral. Shortly after, she left for the US to address a medical condition and stayed there for three decades.

Fast forward to 2015, the lot’s value had skyrocketed to Php 4 billion, and Mrs. Mapera planned to sell it. To prepare, she asked a relative in the Philippines to secure a certified copy (CC) of the title, still under the original owner, Mr. Tindero. To their shock, the title bore annotations indicating it was declared “lost” and re-issued to the broker who had facilitated the sale.

Worse, a broker—now holding a newly issued title—was actively marketing the lot for sale. A long and costly legal battle ensued, during which the court nullified the fraudulent newly issued title. Thankfully, Mrs. Mapera recovered the property, but the ordeal highlighted a critical risk of informal lending.

What Could Have Happened?

Imagine if the broker had staged a fake sale using the re-issued title. With an accomplice willing to pay taxes, they could have transferred the title to a clean, new owner. If sold to a major developer, Mrs. Mapera would then face an even tougher battle—taking on the legal team of a “buyer in good faith.”

Key Takeaways:

Lending Processes: Have processes in place to periodically check on the status of collaterals (e.g., procure the CC of the title each year)

Transfer Titles Immediately: Upon signing a Deed of Absolute Sale, ensure the title is transferred to your name without delay.

Conduct a “Trace-Back”: Obtain CTCs of the current and two prior property titles to check for questionable annotations. This practice is cost-effective and can prevent fraud.

Avoid costly mistakes by taking these precautions—it might just save you billions.