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 to secure payment. A mortgage is registered against the title of your home, and if you don’t make the required payments, the bank may be able to foreclose. This will usually mean you have to pay them the entire amount owing on the mortgage, though sometimes you can arrange to catch up your payments. If you cannot make some kind of arrangement, you risk your house being sold to pay the mortgage. 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.
- Do not ignore the demand letter. If at all possible, you should get legal advice right away. Then, try to negotiate with the lender to see if you can arrange manageable repayment terms.
- If you can’t work things out with the lender, the lender will probably serve you with a BC Supreme Court petition asking for an order nisi of foreclosure. If granted, an order nisi will state the amount owing on the mortgage and will establish a time period - usually 6 months, but sometimes shorter - during which you can redeem, or pay off the mortgage. At some point in the foreclosure process, 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.
- If you are served with a foreclosure petition, it is important to get legal help. If you are self-representing, you must file a response document within 21 days of service, and deliver it to all parties along with any affidavits (sworn written statements) telling your side of the story.
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 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, the best you can hope for is enough time to arrange for other financing to pay out the lender or at least to come up with enough to catch up your payments. You can also use that time to try to sell the house, up to the time the lender gets an order for them to have conduct of sale.
Where to get help
See the Resource List for a list of helpful resources. Your best bets are:
- Credit Counselling Society of BC.
- Access Pro Bono, 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”.
- Clicklaw common question "I’ve missed a few mortgage payments and am facing foreclosure" for a few more resources on foreclosure.
Before meeting with a lawyer or advocate, complete the form Preparing for Your Interview included in this Guide. Make sure you bring copies of all documents relating to your case.
|This Guide explains the law and legal procedures in general. It is not intended to give legal advice on your particular legal problem, and should not be relied on for that purpose. Information in this Guide is accurate as at November 2012. Please note that fees and guidelines outlined in the Guide are subject to change.|