Financial difficulties often mean that people have to make difficult choices about which bills will get paid and which bills have to become delinquent. In some cases, one of the bills that gets put off is the mortgage. When that happens, homeowners might learn that they are facing foreclosure. In Ontario, foreclosures happen through the Power of Sale. If you are facing a foreclosure, understanding this procedure might help you.
Under the Power of Sale process, no lengthy court process is involved. Instead, mortgage holders can sell the home once certain points are met.
The first thing that must occur is that the lender has to serve you with a notice that lets you know information about redemption. The redemption period is 35 days. During that period, you can pay the arrears and other fees that have been applied to your account. If you do that, your mortgage is back on track and the process stops.
If you are unable to redeem the property within 35 days or come to a mutual agreement with the lender, the foreclosure process moves forward. The lender has to serve you with a Statement of Claim for Debt and Possession. You have 20 days from the date you are served to file a Statement of Defence. If you don't file that form, the process moves forward again.
At that point, the lender can get a Writ of Possession for your home. The eviction process begins when the form is filed with the sheriff after it has been obtained from the court.
Once you are removed from the home, the home can be auctioned. If it sells for more than the balance on your mortgage, you would get the balance. If it sells for less, the lender can take you to court to force you to pay the balance unless you have mortgage default insurance.
Source: Canadian Mortgages Inc., "What Happens When a Bank Forecloses on a Mortgage?," accessed April 23, 2015
No Comments
Leave a comment