What are the Different Phases of the Foreclosure Process?

In Calgary, a homeowner can face foreclosure if they fail to make timely payments. It is a challenging process, both legally and emotionally, so you st understand its different phases to tackle it. You need to act fast. Otherwise, the lender will take steps to reclaim the house, list it for sale, and recover the owed amount. So, here we have a complete guide on foreclosure and the probable questions you might ask.

What Constitutes a Mortgage Default?

A property will be declared foreclosed only when a mortgage defaults, which typically arises if the borrower fails to keep up with the payment as mentioned in the repayment agreement. Other than this, defaults can also occur if there is significant property damage, you fail to pay property taxes or condominium fees as mentioned in the deadline, or the property lacks proper insurance. Thus, it is always recommended to go through the mortgage agreements, where every condition is stated.

Steps in the Foreclosure Process

Below are the steps involved:

• Statement of Claim

When the borrower defaults and there is also no proper communication, the lender files a legal claim. Based on this, the borrower gets 20 days to respond, during which time two choices are given: either they need to submit a Statement of Defence or request a notice informing them about the subsequent actions.

• Affidavits of Value and Default

The lender presents detailed documentation of the property’s value and the outstanding mortgage payment record as evidence so that the court can approve and proceed further. Here, the borrower can hire legal advisors to help them understand the multiple process to stop foreclosure.

• Redemption Order

The borrower is given a chance to pay off the arrears. The period can vary based on the dues and other evidence presented at the court. Typically, six months is given to return the mortgage to stable. Under certain conditions, the borrower might also get extensions to ease the financial burden.

• Listing the Property for Sale

If the borrower fails to make the payment, the lender claims the property and lists it for sale. The lender uses the sale amount to settle debts and every outstanding payment. However, if there is any remaining fund, it is given to the borrower in the form of equity.

• Order for Foreclosure

Often, the sale might not be successful, and in this case, the lender requests the court to transfer ownership of the property directly to them. This allows them to track who buy houses in Calgary as they look for potential buyers.

• Possession of the Property

If the foreclosure process is initiated, the property becomes the lender’s legal possession. Usually, the new owner is decided within 30 days; in many cases, it can be the property buyer.

Can Foreclosure Be Stopped After It Starts?

You can easily stop the foreclosure from getting initiated by acting quickly. Opt for open communication with the lender to get alternative options based on your situation. You can choose to negotiate the repayment plans or refinance.

Moreover, one can file a legal defense if appraisals are unfair. You can also seek legal help if you find procedural errors in the foreclosure process.