Foreclosure is never an easy thing to experience. People who lose their homes to foreclosure usually have a hard time recouping their losses. Lenders who have to deal with foreclosures have to accept a financial loss on a property. Foreclosure law in in British Columbia and the Ontario Province can be used by lenders and residential home buyers to avoid this unwanted situation.
British Columbia Foreclosure Law
The foreclosure laws in British Columbia require lenders to send out a demand letter to a mortgage payer before the process begins. This letter will be sent out at least 2 or 3 months after a borrower has stop paying off their loan. At this point the demand letter will be sent to the borrower who will then have to pay the past due balance in full or set up some type of arrangements. If a borrower cannot do this a lender will then start the foreclosure process.
A lawyer will then send out another letter demanding full payment for the past due amount or the current mortgage amount. If a borrower still cannot pay by a specific deadline the attorney will then continue to foreclose the home. A foreclosure petition will be signed and then a mortgage payer will be served a copy of the petition. All interested parties will also be sent a copy of the foreclosure.
The proceeding will then begin about one month later. A judge will usually give a lender an order nisi (a court order that cannot be enforced until certain conditions are met) against a late mortgage payer. This order nisi is designed to give both parties the opportunities a chance to correct this situation. This period is usually called the redemption period. Most redemption periods last for about 6 months. If a borrower is still behind or cannot make payments then the lender can put the property up for sale or seek an absolute order of foreclosure.
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If the property is not able to recoup a lender’s losses then the lender can use a deficiency judgment against a borrower. Also, the absolute order of foreclosure makes the lenders the new property owners and the borrowers name is removed from the title. British Columbia foreclosure laws give borrowers almost half a year to change their circumstances.
Foreclosure Laws in Ontario
Ontario foreclosure law is similar British Columbia laws and the rest of Canada. However, there are some differences. In Ontario they use what is known as the power of sale. This form of sale allows lenders to sell a foreclosed home without the help of a court.
Ontario law allows this process to make the foreclosure period shorter and it works against borrowers. A borrower just does not have a lot of time to change things around when they have to deal with the Power of Sale process.
This process begins once a lender sends a notice to the borrower about their intent. This notice is usually sent out 15 days after a borrower goes into default. All other parties that have an interest in the foreclosed property will also be sent a copy of the Notice of Sale which is also known as Ontario’s Mortgage Act.At this point a borrower has 35 days to pay off a loan if it is listed under contractual. If it is listed under statutory they will have 45 days. This is the only redemption period that a borrower in Ontario will receive.
If a borrower cannot turn their situation around in 45 (35) days or less, a lender can then sell their property. The power of sale allows a lender to sell a foreclosed property by tender, private contract, auction or have it listed with a real estate agent. It can also be placed onto a market for sale.Even though this is a simple explanation about the foreclosure processes in British Columbia and Ontario; Canada foreclosure law can be very complex. Borrowers and lenders should have a basic understanding of the foreclosure process in these provinces to get through the process with very few problems or confusion.