Cancellation of Mortgage and Transfer of Ownership in LTO

I have answered a post in a forum about Cancellation of Mortgage and Transfer of Ownership in LTO and I think it's better to share this with you for education. Without further ado, here it goes:

He asked:

"I bought a car that was previously encumbered. The cancellation of mortgage has been filed correctly but upon filing in LTO for cancellation of encumbrance and transfer of ownership, they require the release waiver and quitclaim from the mortgagee. Is that really a requirement? It is not even stated in LTO's website. Thanks."

I Answered:

The release/cancellation of mortgage issued by the mortgagee will serve as the waiver/quitclaim, proving that the car is fully settled and paid already. The LTO should have acknowledged that.

By the way for the education of many other people who are planning to do the cancellation of mortgage and transfer of ownership in LTO, you need to do these:

1. Get the original documents from the mortgagee: Original OR and CR, promissory note/chattel mortgage or PNCM (it's the contract form with several copies in different colors), release/cancellation of mortgage (it's the one you'll need to present in ROD to have it cancelled), Secretary's Certificate, copies of IDs of the secretary and president of the firm (the names stated in the secretary's certificate), deed of sale from first owner to your name (only applies if you're the second owner), copies of IDs of first owner (only applies if you're the second owner.) All copies of the IDs should bear three specimen signatures.

2. Go to the Registry of Deeds (ROD) where the PN/CM was originally filed (to see where it was filed, look at the PNCM, there's a square blue stamp indicating when and where it was filed. But usually, the ROD branch is where the first owner resides), have it cancelled first there; You need to pay P960 (you need to take care of the pink receipt issued to you upon payment because the LTO will strictly require that) and wait for 4 hours to get the cancellation or if the PNCM happened to be filed in Quezon City ROD, you need to come back after a week.

3. Go to PNP-HPG and get a clearance. I usually apply in Muntinlupa and it takes 3-4 days to get the clearance (but if you want to get it in the same day, you need to bribe them for P1000). I haven't applied yet in Camp Karingal, some others say that it is much faster there. (If your car was registered in LTO branch in other province, you need to go to PNP-HPG of the region where that province belongs.)

4. Go to the LTO branch where the car was first registered. Have it stenciled and inspected there first. Go to the Inspector Windows, the inspector will browse through the documents to check its completeness. After that, you will then ask to submit it inside. You need to pay P750 (with breakdown in the OR) and wait at least 2 hours to get the new CR with your name on it and without the "encumbered" status.

(You can have your car inspected by any LTO branch where you're most convenient with. After the inspection, get the MVIR (inspection report) and OR, attached those with the documents released to you by the mortgagee. This process applies if you're planning to eliminate the need to physically bring your car to LTO where it was first registered. This applies in such case like if the car is now located in other province and very inconvenient to travel because of the distance)

I HOPE THIS HELPS!