The foreclosure process in Alberta is a multifaceted journey, and acquiring a thorough understanding of it is essential for successfully navigating your own home foreclosure. This knowledge empowers individuals to make informed decisions and take proactive steps in managing the intricacies of the specific foreclosure proceedings in Alberta.
Before we dive in…
Understanding the Foreclosure Process in Alberta
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.
Facing foreclosure is undoubtedly challenging, and it’s natural to feel overwhelmed. However, recognizing that the foreclosure process in Alberta is not the end of the world is a crucial mindset.
Understanding the intricacies of the foreclosure process in Alberta empowers you to navigate through this difficult situation with confidence. Acquiring knowledge about the foreclosure process in Alberta becomes a valuable tool, enabling you to make informed decisions and take proactive steps. This knowledge is instrumental in ensuring that you navigate the foreclosure process in Alberta successfully and emerge on the other side as well as possible.
The Basic Stages of A Foreclosure
Understanding the foreclosure process in Alberta involves acknowledging several critical stages integral to this challenging journey. The intricacies of foreclosure vary significantly from state to state across the country.
One pivotal aspect to grasp is that states employ two primary methods for foreclosing upon a property: the judicial sale or the power of sale. Delving into the specifics of the foreclosure process in Alberta, you’ll discover the unique nuances and procedures that define whether a judicial sale or power of sale is utilized.
This comprehension is paramount for anyone navigating through the complexities of the foreclosure process in Alberta, as it provides a foundation for informed decision-making and proactive measures.
Connect with us by calling (587) 400-7060 or through our contact page to have us walk you through the specific foreclosure process here locally in Edmonton.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Your Local Home Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Edmonton, we can help you.
We buy houses in Edmonton Alberta like yours from people who need to sell fast.
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Another Foreclosure Resource For Edmonton Alberta HomeOwners: