The Bank Is Threatening Foreclosure on My Home

When a bank or other institution lends you money to buy a home, they take a mortgage on it. A mortgage is registered against the title of your home, and if you don’t make the promised payments, the bank may be able to foreclose on your home, which means you may have to pay them the entire amount owing on the mortgage or your house will be sold and the bank will be paid out of the proceeds of the sale. The usual first step in a foreclosure is a demand letter from the lender or its lawyer, saying that you are “in arrears” (behind) in your payments and demanding that you bring them up to date.

First steps

1. Do not ignore the demand letter. You should either get legal advice right away or meet with the lender to see if you can arrange manageable payment terms.
2. If you can’t work things out with the lender, the lender will probably send you a copy of a BC Supreme Court Petition asking for an Order Nisi of foreclosure. An Order Nisi will state the amount still owing on the mortgage and establish a time period — usually 6 months, but sometimes shorter — during which you can redeem, or pay off the mortgage. The lender may also ask for an order that your home be sold, and for an order that the lender will have conduct (control) of the sale.
3. If you receive a Petition of foreclosure, you must file an Appearance within 7 days, (indicating that you want to be given all court documents and may want to attend any court hearings), and deliver a Response to the Petitioner within 8 days of filing the Appearance, together with affidavits (sworn written statements) telling your side of the story.

[You can get a blank Appearance, Response and Affidavit at any Supreme Court Registry or most Service BC (Government Agent) Offices. Call Enquiry BC at 1-800-663-7867 for information on the one nearest you. Supreme Court forms are also available online at the Courts of BC website. Click on Supreme Court, then Practice and Procedures, then Act, Rules and Forms. For information on what should go into an affidavit, see Legal Services Society Publications in Part 2 of this Guide, for a copy of the publication, “Can’t Pay Your Mortgage? What you can do if you’re facing foreclosure”.]

What happens next?

The court will set a date for a hearing of the Petition. The judge will read the affidavits and other materials and listen to the lender’s lawyer and to you. Generally, if you are in default of the mortgage, the best you can hope for is a longer period of time to arrange for other financing to pay out the lender, and, if it is necessary to sell the house, an order that you have conduct of the sale instead of the bank.

Where to get help

See the Resource Guide in Part 2 for a list of helpful resources. Your best bets are:

• Credit Counselling Society of BC.
• PovNet.
• Access Justice, Lawyer Referral Service, Salvation Army Pro Bono Lawyer Consultation Program, *Private Bar Lawyers.
• Legal Services Society Publications: “Can’t Pay Your Mortgage? What you can do if you’re facing foreclosure”.

Before meeting with a lawyer or advocate, complete the form Preparing for Your Interview in Part 3 of this Guide. Make sure you bring copies of all documents relating to your case.

The conditional transfer of the title to real property by an owner to another person in return for money given by that person as a loan, while retaining possession of the property. The party to whom title is given, the "mortgagee," usually a bank, is allowed to register the title of the property in their name if the person taking the loan, the "mortgagor," fails to make the required payments. See "encumbrance" and "real property."

In law, a document demonstrating ownership of a thing. See "ownership."

An agreement to transfer the ownership of property from one person to another in exchange for the reciprocal transfer of something else, usually money. See "agreement."

A letter describing a legal claim sent to the person against whom the claim might be made, offering to settle the claim without the necessity of legal action on terms set out in the letter. Demand letters are usually issued before court proceedings are commenced to try to settle a potential claim without the need for litigation.

A person licensed to practice law in a particular jurisdiction by that jurisdiction's law society. See "barrister and solicitor."

Child support or spousal support that is owing because of an order or agreement but is unpaid.

Normally referred to as the "Supreme Court of British Columbia," this court hears most of the trials in this province. The Supreme Court is a court of inherent jurisdiction and has no limits on the sorts of claims it can hear or on the sorts of orders it can make. Decisions of the Provincial Court are appealed to the Supreme Court; decisions of the Supreme Court are appealed to the Court of Appeal. See "Court of Appeal," "jurisdiction," "Provincial Court" and "Supreme Court of Canada."

A court form required by the Supreme Court Family Rules used to commence court proceedings that can be dealt with in the manner of an application, without the need for a protracted process of disclosure and discovery. See "action," "application," "disclosure" and "discovery."

A mandatory direction of the court that is binding and enforceable upon the parties to a court proceeding. An "interim order" is a temporary order made following the hearing of an interim application. A "final order" is a permanent order, made following the trial of the court proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to appeal. Failing to abide by the terms of an order may constitute contempt of court. See "appeal," "consent order," "contempt of court," "decision" and "declaration."

A legal document in which a person provides evidence of certain facts and events in writing. The person making the affidavit, the deponent, must confirm that the statements made in the affidavit are true by oath or affirmation. Affidavits must be signed in front of a lawyer, a notary public or a commissioner for taking oaths, who takes the oath or affirmation of the deponent. Affidavits are used as evidence, just as if the person making the affidavit had made the statements as a witness at trial. See "deponent", "affirm," "oath" and "witness."

In law, any proceeding before a judicial official to determine questions of law and questions of fact, including the hearing of an application and the hearing of a trial. See "decision."

A person appointed by the federal or provincial government to manage and decide court proceedings in an impartial manner, independent of influence by the parties, the government, or agents of the government. The decisions of a judge are binding upon the parties to the proceeding, subject to appeal.

In law, failing to do something which is either optional or mandatory, such as failing to respond to an application or to a claim within the time limits set out in the rules of court. See "default judgment."

(1) A lawyer or a person other than a lawyer who helps clients with legal issues, or (2) to argue a position on behalf of someone.

(1) In law, a court proceeding; a lawsuit; an action; a cause of action; a claim. (2) A historic decision of the court; case law. See "action," "case law, " "court proceeding," and "precedent."