Alberta is Canada’s fourth-largest province, with a population of 4,421,876. The province has registered an increase in foreclosures in recent years. Foreclosures refer to the action of taking possession of the mortgaged property when the mortgagor is unable to make loan repayments. If you are facing foreclosure, it is always good to know the process. Here are detailed steps when it comes to Alberta foreclosures.
In most loan repayment models, the monthly installment is due on the 1st day of the month. However, most lenders give borrowers a 15-day grace period, and you can make payment by the 15th of the month.
If you do not pay the monthly installment by then, the lender levies a late fee and sends you a notice of missed payment. If you do not make any payment for two months, the lender issues a demand letter.
According to a Global news report, foreclosures have increased by 25% annually. The demand letter is generally the first step in Alberta foreclosures. The experts argue that a demand letter is unnecessary as a borrower is aware they have defaulted under the mortgage. However, most lenders still send a demand letter to the mortgagor.
The demand letter may come from an attorney who provides service to the lender or collection agency. The letter mentions the mortgager needs to make two payments in full to prevent foreclosure.
Filing a Foreclosure Claim
If you do not make the payments, the lender starts the foreclosure process. As per Alberta Justice and Solicitor General data, there were 220 foreclosures in 2018-2019 alone. According to foreclosures experts, the Statement of Foreclosure claim initiates the legal process. The foreclosure claim is filed in the Court of Queen’s Bench.
The Statement of foreclosure claim notifies the defaulter that the title of the mortgaged asset belongs to the lender, and he can reclaim the property. Attorneys handle the Statement of foreclosure claim stage, and there is a lot of paperwork involved in the process. The borrower would be liable for the legal fees and additional costs related to the foreclosure process.
After receiving the State of foreclosure claim, you have few options, like filing the Statement of Defense, paying the arrears within the redemption period, or doing nothing. The following steps of foreclosure depend on your response to the Statement of the foreclosure claim.
Demand of Notice
As per the latest data, there were around 219 foreclosure claims by the end of November 2020. As a borrower, you have the right to issue a Demand of Notice. It is a crucial statement that mentions that the borrowers need to be notified about the Statement of foreclosure.
Consent to Foreclosure
If you cannot save your mortgaged property, the last option you have is to present your consent to the foreclosure. Providing consent to the foreclosure will give you some more time to stay in the mortgaged property.
The consent to foreclosure is generally given in writing. Your lawyers can use the time to negotiate with different lenders. The involvement of lawyers at the final stage comes at a steep cost, and it could also worsen your financial situation.