How to Stop Foreclosure Calgary AB
The foreclosure process Alberta homes is a complex, involved process and lenders can begin with only one payment in arrears. But missed payments aren’t the only reason a lender can foreclose on a house. Other reasons a lender may foreclose on mortgage for your property could be for any of the following:
It is important for a homeowner to understand that when a lender grants them a mortgage, walking away from a mortgage in Alberta is not as simple as it sounds should the homeowner find themselves unable to make their payments. There are more potential repercussions other than repaying the mortgage. Such as the legal expense the lender will incur when filing a Judicial Sale of the property.
As such, a deficiency judgment can be granted by the courts to the lender or the insurer and is called a Judicial Sale process. Alberta lenders will receive what is left after paying off all other debts, such as tax liens, to recover the remaining mortgage balance and their expenses.
The following judicial steps will take place in the foreclosure process Alberta homes.
Lender Makes Initial Contact
A lender will commonly call or send a letter to the owner after the first payment is missed. While lenders have the legal right to begin foreclosure then, most of them will offer foreclosure help Calgary home owners by setting up a delayed payment arrangement, instead of beginning the foreclosure process, which takes money and time.
Lender Will Issue A Demand Letter
If the lender is unable to reach the homeowner by phone and there is no response to the letter, and second payment is missed, they will issue a demand letter. A demand letter is notifying the owner they must pay all arrears in full, which includes the original monthly payment and any late fees, immediately to stop a foreclosure. This demand letter may come directly from the lender, a collection agency, or the lender’s attorney.
Foreclosure Claim Issued
The lender will file a claim with the Court of Queen’s Bench and then a statement of claim Alberta homeowner that advises them what action the lender has taken to secure the property title and reclaim the property. The owner will be liable for any additional expense, such as the lawyer’s fee for filing the claim as well as all additional expenses of the foreclosure procedure going forward.
At this point, the owner has a few options on how to stop foreclosure in Calgary Alberta, and while some are beneficial, others have repercussions. Those options are:
Ignore the Calls or Letters
By choosing to ignore the calls or letters and do nothing is not how to avoid foreclosure and is not advised by any legal counsel, however, it is an option that many borrowers will choose. The lenders have offered the borrower a grace period to correct the situation and once that period has expired, the lender can move forward with the foreclosure.
Repay The Missed Payment During The Grace Period
Until the courts have declared a final decree of foreclosure, the borrower has a redemption period foreclosure can be stopped. One method of foreclosure help Calgary homeowners can pay their arrears during the grace period, which is typically three to six months. In some cases, like a high-equity property, some lenders are willing to make payment arrangements.
Issue a Statement of Defense
This is a more expensive option and rarely is approved. Some examples of what may be approved by the courts would be the lender has inaccurate information in the foreclosure documents they filed, or the appraised value is incorrect. The expense of filing a Statement of Defense will be the borrowers.
File Demand of Notice
Stating a Demand of Notice by the borrower is a request to be kept apprised of the foreclosure status and the Judicial Sale process Alberta courts order. This is usually done when the owner is trying to keep the property out of foreclosure by selling it, or they are attempting to gather the funds and save their home. A Demand of Notice eliminates any surprises for the owner.
File Quit Claim
One method of how to stop foreclosure in Calgary Alberta is for the borrower to file a Quit Claim. This is where the borrower agrees to hand the property title back to the lender, which should only be done after consulting with a lawyer, and it does not eliminate any financial penalties for the owner.
File Foreclosure Consent
This is another situation on how to avoid foreclosure, and legal consultation is recommended, would allow the owner to remain in the home under certain agreements and stipulations set by the lender. Because there is a high expense associated with this, is only recommended as a last resort.
Last Step: Court-Ordered Final Sale
If there is not any success in how to stop foreclosure in Alberta with the recourse steps listed above, the courts will issue an order to the lender stating all specifics concerning the property being placed in the Judicial Sale process Alberta court. The borrower will be responsible for all costs and fees for the listing and the realtor. A judge will determine if the price offered by a potential buyer is fair and will either accept or decline that offer. The proceeds of the sale are used to repay any debts that have occurred from the foreclosure process and all monies leftover are refunded to the borrow
How to Stop Foreclosure Calgary
How Is A Borrower’s Future Is Affected By A Foreclosure?
Once a borrower has been through the foreclosure process Alberta home, they are still able to acquire a new mortgage later, but the process is more complicated and will take longer. Getting foreclosure help Calgary area will help a borrower know how to work with a lender again.
Lenders will typically require a borrower to have waited two years after a foreclosure before applying for a new mortgage. They need to be assured that the borrower has completed their redemption period foreclosure process or prove that there were extenuating issues that caused them to go into foreclosure. It is common that a down payment up to 25 percent be required by the lender.
A homebuyer that has experienced the foreclose on mortgage process previously will need to be prepared with documentation that proves they’re financially worthy before applying for another mortgage. That documentation should include proof of their annual income, and bill paying history, including open credit lines.
Home ownership After Foreclosure Is Possible
By creating a history of positive financial standing, a homebuyer that even tried walking away from a mortgage in Alberta, will be able to acquire another mortgage. With that proof of a current, solid financial standing, they will be able to obtain a better interest rate and lower fees, as well as a lower down payment from a lender.
A foreclosure is not the end for any homebuyer, but it will take time to regain creditor’s trust and rebuild a solid, strong credit history before applying for another mortgage loan. Acquiring a secured credit card can help reach that goal of showing financial responsibility by using the card and then pay it off each month. This will help build the credit score up and shows the homebuyer is financially worthy of a mortgage.
While there is a two-year period to wait, a home buyer will benefit by reaching out to possible lenders and inquire about the requirements to be approved for a mortgage. Having that information can help a home buyer formulate a plan of action toward reaching that goal of buying another home after they have completed the two-year waiting period.