For foreclosure prevention to occur, it is in your best interest to act quickly. In some situations, foreclosure prevention involves the process of reinstating your mortgage that is currently in default with your mortgage lender due to missed mortgage payments. The best foreclosure prevention measure you can perform is ensuring you keep your mortgage in good standing with your mortgage lender by maintaining regular mortgage payments.
When your mortgage payments are in default, your lender will send you a notice of default and demand letter, as well as any additional appropriate notices such as notice under the Bankruptcy and Insolvency Act or the Farm Debt Mediation Act. At this stage, you still have the opportunity for foreclosure prevention, however, if you do not pay all of the arrears (missed mortgage payments), interest and legal expenses upon demand (or the full amount of the mortgage paid if the term has expired), your lender will be in a position to prepare, file and serve documents to commence a foreclosure.
If you are involved in a situation regarding default under a mortgage in the pre foreclosure stage and require foreclosure prevention assistance, we can help. We specialize in foreclosure prevention assistance by helping you reinstate your mortgage and bring your mortgage back into good standing with your lender.
The foreclosure process can be complicated, especially when there are competing charges registered on title or disputes about amounts owed or market value of the property. The process for competing bids on an application for Court approval of a sale can also be complex for parties not familiar with the process.
The first Court appearance in a foreclosure is the Order Nisi, which is considered a final order in the foreclosure. Generally, the lender will seek personal judgment against the borrower at the Order Nisi hearing, based on the personal promise to pay. The lender will also seek other terms of the Order, such as the length of the redemption period, the amount required to redeem and legal costs. Legal costs are usually ordered at the lowest level of Court costs in BC, particularly for unopposed Foreclosure proceedings.
The redemption amount is the amount of the principal, interest and expenses that you will need to pay to your lender to payout your mortgage for foreclosure prevention to occur. The usual length of the redemption of a residential property will be set at six (6) months, unless the lender can show risk to its security that would warrant a shorter redemption period (such as insufficient equity in the property to repay the lender in full, abandonment or waste).
If you do not act in regards to foreclosure prevention and do not redeem before the end of the redemption period set at the Order Nisi hearing, then the lender may elect to return to Court to seek either an Order Absolute or an Order for Conduct of Sale. In a relatively recent development in foreclosure practice, a lender can now actually obtain conduct of sale at the Order Nisi hearing that will be effective at the end of the redemption period without the necessity of a further court application.
An Order Absolute basically involves the property being transferred to your lender as the new owner. Usually the borrower (you) or subsequent lenders will oppose the Order Absolute if there is convincing evidence of equity. However, if an Order Absolute is granted and there is a shortfall for the lender, then the lender will not be able to try to recover any shortfall on the personal judgment from the borrower after the Order Absolute. In addition, the lender will have to pay the property transfer tax on the transfer of the property to the lender. In many cases the lender will not elect to seek an Order Absolute.
When your lender decides not to pursue an Order Absolute, then the lender can still apply to the Court for an Order for Conduct of Sale at the end of the redemption period. An Order for Conduct of Sale allows your lender to list and market the property through a realtor. You will then be ordered to cooperate with the listing of the property. Your lender will be able to entertain and accept offers, subject to any accepted offer still requiring Court approval. The usual practice is for offers to have a schedule attached to the Contract of Purchase and Sale specifying that the property is being purchased “as is” without any warranties as to the condition of the property.
For foreclosure prevention to occur, it is in your best interest to act quickly if you have received a demand letter in regards to your delinquent mortgage payments. Contact us for Free consultation in regards to foreclosure prevention to help protect your equity and your credit.
Reference: Eric Ledding, Pushor Mitchell LLP Law Firm