What is a Foreclosure?
A foreclosure is essentially a situation in which a homeowner has failed to make payments of principal and / or interest on their mortgage. The lender can demand full payment of the outstanding mortgage and then petition the Supreme Court to begin foreclose proceedings on the property as per the terms of the mortgage contract. Although many foreclosures involve mortgage defaults, foreclosure can also take place in the event the homeowner fails to pay municipal property taxes or condominium (strata) fees. The foreclosure process can result in a highly motivated seller and potentially a significant discount for the purchaser.
A. When a secured creditor, usually a bank, attempts to recover monies owed to them based on a promissory note by selling the collateral. In more simple terms you have probably borrowed money from a bank or mortgage company in order to purchase or refinance a home. In exchange for lending you the money, you made a promise that if you could not pay them back they could take the house. I will refer to the events associated with these actions as the foreclosure process.
If you have bought a home using a home loan, your lender will have taken a security interest in the property. If you find that you cannot keep up with mortgage repayments on your home, the security interest gives the lender the right to proceed with a foreclosure. This can involve auctioning off your house and using the proceeds to recover their investment. If your property is not sold or the purchase is not enough to cover the lender’s loan, a deficiency judgement could be pursued against you. A foreclosure and a deficiency judgement will seriously hinder your prospects to obtain real estate in the future. A foreclosure is a worrisome prospect for anyone, but there are options you can pursue in order to avoid it. The first thing you need to do is to decide whether it will actually help your financial problems to allow the foreclosure to happen. If your problems are of a temporary nature, such as a sudden job loss, then it may be only a matter of time before you are again financially v
