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Canadian Foreclosure Process

Canadian Foreclosure Process

Canadian Foreclosure Process

Canadian Foreclosure Process

Canadian Foreclosure Process,a professional Canadian Real Estate investor should understand thoroughly about Foreclosure process in Canada. Not only property owner, but also Lender consider the word “foreclosure” as their nightmares. It happens all the time, regardless which cycle the market is going through, although the numbers do tend to go up during the Real estate bust cycle. If the person who borrowed money using a mortgage fail to pay back that mortgage, money-lender can use foreclosure as a legal action. By first getting a Court’s permission, foreclosure allows lender to take or sell that person’s house. When a property-owner misses a mortgage payment or makes a late payment, the property owner will not automatically lose their property. Because the process is time-consuming and expensive; lenders don’t want to foreclose if not necessary.  A foreclose would properly started by the lender after two or three months when the borrower failed to pay. Usually, a lender will send out letters requiring payment. Then, if they don’t receive a reply, the lender will usually start to foreclose and to sue at the same time. The foreclosure process differs from province to province in Canada. There are two main methods for lender to recover mortgage debt in Canada: 1. Judicial Sale. a. Conducted under the supervision and authority of the Court. b. Lender must apply for a court’s permission to sell property. c. Extensive Court involvement in every step. Process involves lawsuit against borrower and other liable parties. Judicial Sale are Primarily used in:• British Columbia• Alberta• Saskatchewan• Manitoba• Quebec• Nova Scotia 2. Power of Sales. a. Without the court’s involvement, lender is allowed to sell property. This particular method was created to keep the recovery process out of the court system and created the ability to make it happen at a much quicker rate than a foreclosure. b. The Process is started by sending a notice to the borrower. c. Deficiency Judgment: lender must seek action against borrower after property has been sold Power of Sale is primarily used in:• Newfoundland• New Brunswick• Prince Edward Island• Ontario. Generally speaking, foreclosure is a losing proposition for all the parties concerned. The number of mortgage defaults varies from market to market, and there is no data available to demonstrate the exact figures. In Canada, approximately there are over 1,100 mortgage lenders. The default rate that the five major lender report is 0.26% to 0.65%. The above information is provided as a guideline and is not intended to give a professional legal advice. Please consult a real estate lawyer for their opinion on your particular case  
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