Navigating the Foreclosure process in British Columbia can be difficult. Most people are unaware of the pitfalls that can happen while trying to chase a "good deal" through the purchase of a foreclosure property.
In this five part series I'll unpack the Foreclosure process in British Columbia. I'll discuss the difference between Foreclosures and other types of Court Ordered Sales. I'll also breakdown some of the myths associated with foreclosures and the types of orders that can be given by the courts to the Lenders.
If you're thinking of purchasing a Foreclosure property this 5 part series is perfect for you.
- Default: The foreclosure process begins when a borrower defaults on their mortgage payments. In British Columbia, if a borrower misses three consecutive payments, the lender can initiate the foreclosure process.
- Notice of Default: After the borrower defaults on their mortgage payments, the lender must issue a Notice of Default to the borrower. The notice must specify the amount of the outstanding debt, the default, and the amount of time the borrower has to cure the default.
- Right to Cure: The borrower has a right to cure the default by paying the outstanding debt and any associated fees before the end of the cure period specified in the Notice of Default. If the borrower cures the default, the foreclosure process will not proceed.
- Petition for Foreclosure: If the borrower does not cure the default, the lender can file a Petition for Foreclosure with the Supreme Court of British Columbia. The petition must include a statement of claim, a copy of the mortgage, and an affidavit stating the amount owed.
- Order Nisi: If the court grants the Petition for Foreclosure, it will issue an Order Nisi, which gives the borrower a period of time to redeem the mortgage by paying the outstanding debt and any associated fees.
- Sale: If the borrower does not redeem the mortgage within the time specified in the Order Nisi, the lender can proceed with the sale of the property. The property will be sold at a public auction, and the proceeds will be used to pay off the outstanding debt and any associated fees. Any surplus funds will be returned to the borrower.
- Deficiency Judgment: If the proceeds from the sale of the property are not enough to cover the outstanding debt and any associated fees, the lender can seek a deficiency judgment against the borrower. A deficiency judgment is a court order requiring the borrower to pay the remaining balance.
- Redemption: In some cases, the borrower may have the right to redeem the property after the sale by paying the outstanding debt and any associated fees.