A foreclosure, also known as a judicial sale, is a common way for mortgage lenders to recover their money in specific parts of Canada. The Canadian provinces where foreclosures are most common are British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, and Nova Scotia. In Ontario and other provinces, Power of Sale is the prefered method since it is much faster a cheaper for lenders. Many of our clients mistakenly claim to be in foreclosure, when they are actually in a Power of Sale.
In each Canadian province, the foreclosure is slightly different, but many of the steps are similar. If you continually miss your monthly mortgage payments, you will recieve a letter, typically called a “Notice of Sale Under Mortgage”, telling you to make payments before the lender starts the foreclosure process. If you do not respond to the notices, you will recieve a doument called a “petition for foreclosure” which means that the foreclosure process is in motion and registered with the courts.
When the foreclosure action has been passed, the lender takes ownership of the property, and all libilities that are on the property. This is different from a Power of Sale, where the lender cannot take title, but they may sell the property and are not responsible for any other liabilities.
Many people believe that there foreclosure properties are extremely cheap because the lender must sell the house or property for whatever the real estate market can justify. The reality is all lenders try to get the highest price possible for every house or property that is repossessed, great deals happen only when the lender or bank has had no offers on the property.
When dealing with a bank foreclosure or bank repossession the purchaser needs to be aware of all the legal details related to the property, therefore we recommend that every person buying or selling a bank foreclosure sale or repossession retain a lawyer to handle the transaction. As power of sale and foreclosure specialists we can assist in financing the property and tell you if you should buy or sell a power of sale property.
For more information on how to stop a bank repossession or power of sale please go to our home page or please give us a call.