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Difference between revisions of "Mortgages and Foreclosure"
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Mortgages and Foreclosure (view source)
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=== Foreclosures=== | === Foreclosures=== | ||
Foreclosure is the most common way for a mortgage lender to enforce its rights under a mortgage that is in default. Historically, foreclosure was the legal process by which the lender closed off the right of the borrower to get the title back, back when mortgaging meant there was an actual transfer of the property to the lender until the mortgage was completely paid. Under the present [http://canlii.ca/t/8456 ''Land Title Act''], there is not an actual transfer of the property to the lender, but the remedy remains essentially the same process: the lender goes to court to get the property or to get the property sold in order to recover the money lent. | '''Foreclosure''' is the most common way for a mortgage lender to enforce its rights under a mortgage that is in default. Historically, foreclosure was the legal process by which the lender closed off the right of the borrower to get the title back, back when mortgaging meant there was an actual transfer of the property to the lender until the mortgage was completely paid. Under the present [http://canlii.ca/t/8456 ''Land Title Act''], there is not an actual transfer of the property to the lender, but the remedy remains essentially the same process: the lender goes to court to get the property or to get the property sold in order to recover the money lent. | ||
==== The foreclosure process==== | ==== The foreclosure process==== | ||
Foreclosures are started by petition, under the [http://canlii.ca/t/8lld Supreme Court Civil Rules]. If there are no special circumstances to suggest a lender should delay starting a foreclosure, the process is usually started around the third month that the mortgage is in default. The law requires the borrower to be served with the petition. | |||
In most mortgage default cases, there is no formal trial on the issue of default. Because the default is usually not seriously in doubt, and because in most instances debtors do not have a defence to the claim for the amount owed, the Supreme Court Civil Rules allow foreclosures to be heard in a fairly summary manner. | In most mortgage default cases, there is no formal trial on the issue of default. Because the default is usually not seriously in doubt, and because in most instances debtors do not have a defence to the claim for the amount owed, the Supreme Court Civil Rules allow foreclosures to be heard in a fairly summary manner. | ||
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In some foreclosure proceedings a lender who obtains a conduct of sale of the property may sell it (with the court’s approval of the sale) for less than the amount owing to the lender. In this situation, the borrower remains personally liable to pay the lender for the amount still owing. That amount is called the “'''deficiency balance'''”. | In some foreclosure proceedings a lender who obtains a conduct of sale of the property may sell it (with the court’s approval of the sale) for less than the amount owing to the lender. In this situation, the borrower remains personally liable to pay the lender for the amount still owing. That amount is called the “'''deficiency balance'''”. | ||
(By contrast, where a lender applies to court for a final order of foreclosure and the title to the property is transferred to the lender, the borrower’s liability is extinguished. That is so even if the lender eventually sells the property for less than it was owed.) | (By contrast, where a lender applies to court for a final order of foreclosure and the title to the property is transferred to the lender, the borrower’s liability is extinguished. That is so even if the lender eventually sells the property for less than it was owed.) | ||
== Information gathering== | == Information gathering== | ||
