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Understanding the Foreclosure Process in ON

Understanding the foreclosure process in ON is an important part of navigating your own home foreclosure.

Before we dive in…

Understanding the Foreclosure Process in ON

What is foreclosure anyway?

When a homeowner is in arrears with their mortgage payments, foreclosure is a legal procedure that takes place. Via the foreclosure procedure, the lender is able to seize ownership of the home and sell it to recoup the mortgage debt.

When you know how foreclosure in ON works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.

The Basic Stages of A Foreclosure

There are a few stages that are important to any foreclosure process. Here is an overview of the foreclosure process

Foreclosure works differently in different states around the country.

The two ways different states use to foreclose upon a property are: judicial sale or power of sale

Connect with us by calling (647) 274 7572 or through our contact page to have us walk you through the specific foreclosure process here locally in Greater Toronto Area (GTA).

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.

  1. Default: When a homeowner doesn’t make their mortgage payments, the foreclosure process gets started. A mortgage payment is often regarded as being late if it is not received by the due date plus 15 days.
  2. Mortgage lender will send a notice of default after a homeowner has missed several mortgage payments. The homeowner is informed in this paper that the foreclosure procedure has started and that they are in default on their mortgage.
  3. Lender will deliver a notice of sale once the homeowner has been in default for a predetermined amount of time. This document notifies the property’s owner that an auction will be held to sell it.
  4. Auction: A public sale where the property is auctioned to the highest bidder takes place during a foreclosure auction. The purchase can be made on the courthouse steps, online, or at a specific spot. At the time of the sale, the winning bidder must make full payment for the purchased item.
  5. Redemption period: Several states allow homeowners to still regain their property during this time. The owner can settle the mortgage balance and keep the house during this time. If the homeowner doesn’t, the sale is considered complete.
  6. Eviction: The new owner may start eviction proceedings to evict any remaining inhabitants if the homeowner does not recover the property within the redemption term.

Anyone who has an interest in the property must be notified during the process of foreclosure.

For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of the foreclosure.

What Happens After A Foreclosure Auction?

The loan balance is settled with the proceeds of the sale following the foreclosure.

A shortfall judgment may be rendered against the borrower if the proceeds from the sale of the property at auction are insufficient to repay the debt.

When the bank obtains a deficiency judgment against you, the borrower, it is for the money outstanding to the bank on the loan amount following the foreclosure sale.

While other provinces permit the whole loan amount to be charged against the borrower, certain states limit the amount payable in a deficiency judgment to the fair worth of the property at the time of sale.

Here’s a great resource that lists the province by province deficiency judgment laws, since every state is different.

In general, you should stay away from foreclosure auctions. To prevent having to carry out a foreclosure, call the bank instead, or deal with a respectable real estate company like us at RE/MAX Excellence Real Estate Brokerage to assist you to negotiate discounts off the amount owing.

Even if your house is worth less than what you owe, experienced investors can assist you by directly negotiating with banks to reduce or even erase the amount you owe in a sale.

If you need to sell a property near Greater Toronto Area (GTA), we can help you.

We buy houses in Greater Toronto Area (GTA) ON like yours from people who need to sell fast.

Give us a call anytime (647) 274 7572 or
fill out the form on this website today! >>

Another Foreclosure Resource For Greater Toronto Area (GTA) ON HomeOwners:

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