If you’ve gotten a foreclosure notice of default and want to know what the heck is going on, keep reading.
Basically, a foreclosure notice of default is a document that has to be filed by a lender to start the process of foreclosure, although most lenders will generally avoid full foreclosure where they become the owner of the property.
Foreclosure is a lengthy process in Canada which can take 6-12 months. Usually it is much easier for lenders to use the Power of Sale provision in the mortgage agreement.
The Power of Sale provision allows the lender to sell the property on your behalf without actually taking possession of the property. Canadian law dictates that when using this provision, lenders are obligated to try and get the highest possible sale price for your property.
In theory this is a good consumer protection, but in reality it is difficult to enforce. Lenders won’t care about what time of year they are selling, they won’t negotiate hard, they won’t do minor repairs to increase the value of the property. At the end of the day, you are still not in control of the situation once the bank does this.
So, when the bank gives you notice they intend to go through with a Power of Sale, it’s in your best interest to see if you can sell the property yourself to take back control of the situation and get the most possible for your house.
Back before Canadian law required a notice of default, people were sometimes foreclosed on without any warning.
In fact, it’s happened even in the past few years – at least one bank has accidentally foreclosed on the wrong property and kicked people out of their house without due process or warning.
The notice of default is a very important step within the foreclosure process that gives people with an interest in the property to step forward and claim their rights – before it’s too late.
If you’ve received a notice of default, don’t wait. Time is definitely of the essence, and you should take action.
Here are a few key steps you should take:
1) Stay calm and don’t panic.
This may sound obvious, but it’s probably the most important. Anyone in foreclosure is dealing with a lot of stress beyond just the property. These situations don’t happen overnight, and they take a while to solve. You’ll get through it by practicing good coping techniques and taking good care of yourself and your family. Panic leads to bad decisions, so stay cool.
2) Educate yourself.
Learn everything you can about avoiding the foreclosure process in your province so that you know what’s happening and what’s coming up next.
3) Gather your resources.
There’s also many non-profit and government resources available out there. You’ll want good legal and tax advice along the way. Definitely don’t try to do it all yourself. This stuff is super complicated with lots of rules.
4) Learn your options.
We’re here to help you avoid foreclosure. We buy houses with cash. We can help you with short sales and even rent-back situations so you (potentially) may be able to keep living in your home. There are many more options than you think.
5) Communicate.
The banks involved don’t want your property. They want money, and what you say matters a lot. You can slow down or stop the foreclosure process if you take the appropriate action. The important thing is to act, because if you don’t take action you will lose control of the situation and may not get as much money as you could otherwise!
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