3 Steps in The Foreclosure Process
- Homeowner stops making mortgage payments.
- Mortgage Lender demands all money owed plus extra costs
- Courts sell the house to a new owner or back to the Mortgage Lender.
That is the short version of the foreclosure process in the City of Calgary. Of course, the route from #1 to #3 will take time and lots of twists and turns.
“The foreclosure process starts slowly and can take a long time, sometimes years, to wind its way through the legal process.”
Before the first mortgage payments were missed, it was just the homeowner and the lender involved. Now after a few mortgage payments have been missed, the cast of characters starts to grow. The lenders have their lawyers ready and waiting to pounce. Appraisers and Realtors jump into the fray at some point. Couriers and secretaries all play supporting roles. And guess whose dime they are all working on? That’s right, the homeowner in default of the mortgage payments is footing the entire bill. Any equity the homeowner had in the house is being drained faster than a leaking bucket of water. As soon as the equity bucket is empty, the court sells the property back to the mortgage lender.
There are a lot of official names for documents, processes, etc., that will start to become a bit familiar. Foreclosure, Statement Of Claim, Plaintiff, Defendant, Rice Order, Order Nisi, Order For Sale, Judicial Listing, Order Confirming Sale, Title, Certificate of Lis Pendens, Conventional Mortgage, High Ratio Mortgage, Redemption Period, Equity, Law of Property Act, Default, Demand Letter, Liability, Pending Litigation, Law Suit, Legal Costs, Demand of Notice, Service Of Documents, Appraisal Value, Relief, Forced Sale, Notice of Motion, Deficiency Judgment, Vacate, Affidavit, Court Discretion, Court of Queen’s Bench, Right to Redeem, Extinguish the Foreclosure Action, Vesting Title, Encumbrances, Possession, Preservation Order, Summary Judgment, and probably quite a few more new words to add to your vocabulary.
Then the mortgage lender sells the property to a new owner, and the difference between what they sell the property for and what was owed by the previous owner could still come back to haunt the previous owner.
If you find yourself in this situation, the first call you need to make is to the Mortgage Lender. They are motivated to keep you in the house and to keep the lawyers looking for other work.
As you can probably tell, it can get overwhelming and messy if you’re the unlucky homeowner faced with foreclosure. Seems only the lawyers processing the process are the happy ones. The Mortgage Lenders do not want your house; they just want payment for the money you rented from them to buy it. And all you want is the house.
The mortgage lenders will only abandon you if you abandon them. Never be afraid to pick up the phone and go meet them to discuss possible solutions that will work for everyone.