Canadian Foreclosure Process
The word “foreclosure” is a nightmare for the property owner as well as for the Lender. Although the numbers usually increase during the real estate bust cycle; it happens all the time.
If the person who borrowed money using a mortgage fail to pay back that mortgage, money-lender can use foreclosure as a legal action. Foreclosure allows the lender to take or sell that person’s house by first getting a Court’s permission to do so.
The property owner will not lose their property right away when he misses a mortgage payment or makes a late payment. Lenders don’t want to foreclose if they don’t have to because it is expensive and is a lengthy process. Not until two or three months after the borrower has stopped paying, would the lender probably start to foreclose. Usually, a lender will send out letters requiring payment. Then, if they don’t receive a reply, the lender will usually start to foreclose and to sue at the same time. The foreclosure process differs from province to province in Canada.
1. Judicial Sales
a. Conducted under the supervision and authority of the Court.
b. Lender must apply to the court to get permission to sell property.
c. Extensive Court involvement in every step.
Process involves lawsuit against borrower and other liable parties.
Judicial Sale are Primarily used in:• British Columbia• Alberta• Saskatchewan• Manitoba• Quebec• Nova Scotia
2. Power of Sales.
a. Allows lender to sell property without the involvement of the court. This particular way was created to keep the recovery process out of the court system, as well as created the ability to make it happen at a much faster rate than a foreclosure.
b. The Process is started by sending a notice to the borrower.
c. Deficiency Judgment: lender must seek action against borrower after property has been sold
Power of Sale is primarily used in:• Newfoundland• New Brunswick• Prince Edward Island• Ontario.
Generally speaking, foreclosure is a losing proposition for all the parties concerned.
There is no data available to show exact figures, and the number of mortgage defaults are different from market to market. Approximately there are over 1,100 mortgage lenders in Canada. The five major lenders report a 0.26% to 0.65% default rate.
The above information is provided as a guideline and is not intended to give a professional legal advice. Please consult a real estate lawyer for their opinion on your particular case.
Your success is our business!
www.CanadianWealthBuilders.com | www.preigCanada.com
Newsletter: Subscribe REI Club Membership | Apprenticeship | LIVE Training
Blog | Facebook | LinkedIn | Google+ | Twitter