Home Foreclosure in Alberta: What You Need to Know

Home foreclosure can be a traumatic experience. If you're a homeowner in financial distress, it helps to know what's coming, what to expect, and what you can do about it. In Alberta, the home foreclosure process can be time consuming, so if you're having a hard time making payments, you may be able to catch up before the foreclosure process is finished. Here's what you need to know.

For informational purposes only. Always consult with a certified tax expert before proceeding with any real estate transaction.

What Causes Home Foreclosure in Alberta?

Many homeowners go into foreclosure in Alberta because of a missed mortgage payment. However, there are other reasons that a homeowner might go into foreclosure, including:

• Missed homeowner tax payments.
• Missed payments to the Homeowners Association
• Lack of home insurance coverage.

What Happens During a Home Foreclosure?

When a homeowner misses a payment, the lender usually starts by contacting the homeowner, either in a letter or over the phone. If the homeowner has an explanation and makes the missed payment quickly, then the process stops right then. If the lender contacts the homeowner and the homeowner does not respond, then the lender usually sends a demand letter.

The demand letter is usually sent after the second missed payment. Eventually, if the homeowner does not make the missed payments and late fee payments, the homeowner will receive a statement of foreclosure.

If You're Going Through a Foreclosure, What Can You Do?

Many people who go through foreclosure do not take action; they simply ignore the letters. When this happens, many lenders will immediately skip to the final stages of the foreclosure, once the required grace period has passed. Aside from doing nothing, there are other things that the homeowner can do.

Quitclaim

The quitclaim is what happens when the homeowner gives up the title to the home without taking any other action. The quitclaim means that the homeowner gives up all control over the house immediately.

Consent Order

The consent order is common in Alberta. Consent orders, when they go through properly, often give the homeowner about 30 days to vacate the property, while the bank is the legal owner.

Repay Arrears

Until the final foreclosure order goes through, it's possible for homeowners to pay arrears and stop the foreclosure process. This is often the best solution, but for homeowners who do not have the financial means, this is not often realistic.

Statement of Defense

The statement of defense is the procedure for arguing the foreclosure process against the lender. This is not common and it's rare for people to win. Fighting the bank is often expensive, so many people who are in foreclosure do not even look at this as a realistic possibility.

How Does Foreclosure End?

Unless the Auburn Bay homeowner is able to catch up on payments, foreclosure ends when the home is put up for sale and is eventually sold. The homeowner is responsible for the costs incurred by the bank during the home sale.

Work With Your Lender

If you're a homeowner who is having a hard time making payments for your mortgage, contact your lender. Your lender can help you assess your financial situation and decide what is best for you. Your lender may have solutions that do not involve defaulting on your mortgage payment, that would also enable you to stay in your home.

For informational purposes only. Always consult with an attorney or certified tax expert before proceeding with any real estate transaction.