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If you are faced with foreclosure or are considering taking foreclosure action against a borrower, Navigator Law is here to help.

Foreclosure can be a complicated and confusing process, but our experienced team of lawyers offer the legal advice and support you need to navigate through foreclosure or a foreclosure dispute.

at is Foreclosure?

If a borrower is unable to make their mortgage payments on time, or otherwise defaults on the mortgage, the lender can choose to proceed with foreclosure. Foreclosure is a legal process where the lender, usually a bank, can take over ownership of the property or sell it

The mortgage agreement sets out the conditions the lender agrees to when taking out the loan. Common reasons for mortgage default include:

  • Not making mortgage payments on time
  • Not maintaining or damaging the property
  • Not insuring the property
  • Not paying property taxes or condominium fees

At its core, foreclosure is a way for the mortgage lender to make sure that they can recover the money owed under the mortgage.

The Foreclosure Process

When the borrower defaults on their mortgage, the lender will usually contact the borrower to try to resolve the issue. In cases of missed mortgage payments, if the borrower and lender can make an agreement to repay the outstanding arrears immediately or through a temporary alternative fee schedule, the bank or lender will typically end the foreclosure process before it has begun.

If the lender chooses to move forward with foreclosure proceedings, the steps in the process are as follows.

Demand Letter

In response to mortgage default, the lender will send a demand letter notifying the owner of the mortgage that if they do not pay their outstanding arrears, the lender will commence with foreclosure.

Filing of Foreclosure Claim

If the borrower and lender can’t resolve the matter, the lender can file a foreclosure claim (statement of claim). In Alberta, the claim is filed at the Court of Queen’s Bench.

Borrower Response

The borrower has a number of options in responding to the foreclosure claim. Each of these options can have serious legal and financial consequences for the borrower, and seeking legal advice before responding to a foreclosure claim is highly recommended.

  • 1. Do nothing. If the borrower doesn’t respond to the foreclosure claim, the lender is able to note the borrower in default.
  • 2. Repay the arrears. Up until the court grants a final order, the borrower has the option to repay the outstanding mortgage payments.
  • 3. Statement of Defence. If the borrower believes that there is an error in the arrears owed or paid, they can file and serve a Statement of Defence.
  • 4. Demand for Notice. The borrower can also file and serve a Demand for Notice. This allows the borrower to be kept up to date with the foreclosure process. If the borrower is trying to sell their property or save up money to repay the outstanding arrears, they will know when the final foreclosure will take place.
  • 5. Quit Claim. The borrower may choose to transfer ownership of the property to the lender.
  • 6. Consent Order to Foreclosure. The borrower and lender can negotiate a Consent Order and apply for court approval of the order. With this type of agreement, the lender becomes the owner of the property and typically gives the borrower 30 days to vacate the property.

Court Order

After the borrower has had time to respond to the foreclosure claim, the bank or lender can apply to the court for different types of remedies such as the sale of the property. Based on this application, the court may issue different types of orders. The court can also find that the borrower did not commit an act of default and not issue any order.

  • 1. Redemption Period. Typically, the court will give the borrower a specific amount of time to repay the arrears owed.
  • 2. Order for Sale. If the borrower cannot pay the outstanding arrears within the redemption period, the property is put up for sale. The court has to approve any valid offers to buy the property.
  • 3. Order for Foreclosure. With this judgement, the bank or lender becomes the legal owner of the property.
  • 4. Deficiency Judgement. Usually, the bank or lender can only collect money owed through the sale of the property. Some mortgages, however, let the lender sue the borrower if selling the property isn’t enough to cover the remainder of the mortgage owed.

How Can a Foreclosure Lawyer Help?

Having a lawyer by your side when going through the foreclosure process can be extremely helpful for both lenders and borrowers. By getting sound legal advice, you can prevent any legal issues and ensure that the foreclosure process is handled in the most cost-effective manner.

Navigator Law’s experienced lawyers can assist with legal services for real estate foreclosure both if you are faced with foreclosure and if you’re looking to take foreclosure action against a borrower.

Representing Lenders

If your borrower has defaulted on their mortgage, Navigator Law can help you protect your investment and support with any related real estate transactions throughout the process.

Whether the lender is a bank, credit union, condominium association, or a private lender, we can provide experienced legal advice for all types of foreclosure situations, including:

  • Residential foreclosure
  • Commercial foreclosure
  • Condominium foreclosure

Representing Borrowers

Foreclosure can be a stressful and confusing time for homeowners. Our knowledgeable team of lawyers can help you understand your rights, your options available, their implications, and take the necessary legal steps in the foreclosure process.

If you are faced with a lawsuit for a deficiency judgement, we can also help you negotiate with CMHC or Genworth.

Navigator Law can draw from our experience in foreclosure law and other legal areas such as real estate law to give you the legal advice you need.

Contact Us

Our legal team can help you with many different Calgary foreclosure matters. Contact our Calgary law firm to book an appointment or to learn more about our foreclosure legal services.

Frequently Asked Questions

Can a lender start the foreclosure process after one missed payment?

Yes, the lender can seek foreclosure after just one missed payment. However, most lenders will try to work out a plan with the mortgagor first, for example with a temporary alternate payment schedule.

Is foreclosure the same as bankruptcy?

No, foreclosure is essentially a breach of contract as a result of mortgage default. The process for foreclosure and bankruptcy is very different. Learn more about our bankruptcy legal services here.

Who pays for the foreclosure process?

The borrower is responsible for paying for the foreclosure process, including the legal fees for both the lender and the borrower.

How long does the foreclosure process take?

It varies, depending on each situation. From start to finish, the entire foreclosure process can take anywhere from a few months to over a year.