Foreclosure is a legal proceeding in which the homeowners fail to pay the monthly amount or meet their mortgage obligations, which is declared a dispute. In this condition, the lender has the right to take possession of the Calgary house and list it for sale to recover the outstanding payment. The entire process is monitored through a judicial process, and foreclosure provides legal oversight. So, if you want to understand your legal rights as a homeowner, this guide can help.
Judicial Sale vs. Power of Sale
Foreclosure in Canada is executed in two primary processes: Judicial Sale and Power of Sale, but the applicability varies based on the provincial legislation:
- Judicial Sale
In Alberta, the court-supervised process is used. The lender files a lawsuit, and a court order is obtained, which gives the lender possession of the house and allows them to sell the property. Being supervised by the court, the entire process is conducted by maintaining a fair judgment. The house owner gets a redemption period to repay their debts, which temporarily stops the foreclosure and gives them a chance to regain ownership. However, the process can be lengthy, and both parties must bear the expenses.
- Power of Sale
This is mainly found in the provinces of Ontario, which allows the lenders to sell the property. This is a much faster and cost-effective process, with no court involvement. Here, the homeowner gets a notification about the foreclosure process, and a grace period is given, which might help them catch up on payments. However, if the process cannot be stopped, the lender has to sell the property at a fair market value, and the surplus amount is given to the borrower.
Legal Rights of Homeowners During Foreclosure
Regardless of the province, homeowners do have specific rights, which, if exercised carefully, can stop or halt the foreclosure process:
- Right to Notice
The lender must send the borrowers a formal notice of default notifying them of the missed payments and mentioning the actions that would be taken to remedy the situation.
- Right to Redemption
In the case of Judicial Sale provinces, if you want to know “how to stop foreclosure in Alberta,” then exercise the right to redemption. Here, the borrowers are given a redemption period, which gives them the time to repay the arrears and stop the foreclosure.
- Fair Sale Proceeds
The excess funds obtained from the property sale must be given to the borrower based on the fair sales proceeds. However, this is only applicable in Power of Sale provinces and after clearing the debts.
- Right to Contest
If you find any error or unfair practices have been implemented by the lender, then the homeowner has every right to challenge foreclosure proceedings and halt them.
Conclusion
It might seem challenging and complicated if you have to go through a foreclosure procedure. Still, with legal support and professional guidance, you get to understand your rights and options. They can help you negotiate with lenders and explore options like refinancing, cash offer for homes, or loan modification to stop foreclosure. Financial advisors specializing in foreclosure can also provide tailored advice to prevent such events.
