FORECLOSURE GUIDANCE and PREVENTION 
Foreclosure happens when a homeowner can no longer make their mortgage payments. This is considered a breach of the mortgage, and it triggers a series of legal steps that every homeowner should understand. Knowing the process , and your options, can make an enormous difference. Foreclosure proceedings are a judicial process whereby a mortgagee or lender seeks ownership over a property where the owner has defaulted or failed to meet their loan obligations. Foreclosure is commenced by way of petition supported by affidavits setting out the amount owing, the lender’s efforts to collect the debt, and any demands issued to the debtor. The petition will also often seek a Certificate of Pending Litigation over the property.

What Starts the Foreclosure Process
Foreclosure begins when the lender determines that you are unable to pay your mortgage. In most cases, the lender will:
-Send at least two demand letters (these have no legal effect but give you a chance to fix the breach)
-Add the cost of those letters to your mortgage balance
-Transfer your file to their lawyer for legal action
-Add all legal costs to your outstanding principal
-Pay overdue property taxes on your behalf
-Issue an injunction if necessary to stop improper or illegal activity on the property

Homeowners may raise issues if the mortgage document or the mortgage amount is incorrect.

=Example: If Your Home Sells for Less Than You Owe
If you owe $200,000 but the best offer after 6 months on the market is $150,000, the lender may accept the $150,000, however the remaining $50,000 becomes a deficiency. That deficiency stays on your financial record for 7 years

The Redemption Period in B.C.
Redemption periods, the time you are given to catch up and bring the mortgage back into good standing, depend on the type of agreement:

-Agreement for Sale: 3 months
-Mortgage: 6 months

A vendor under an agreement for sale may pursue specific performance or cancellation. A lender in a standard mortgage situation proceeds with foreclosure.

Foreclosures in B.C. fall under several statutes:
-Law & Equity Act
-Land Title Act
-Condominium Act
-Property Act

The process begins with a petition. If you do not respond, the lender can obtain an Order Nisi, which officially starts the redemption period.

During this time:
-You may provide evidence of your property’s value
-You may highlight special factors that support granting a longer redemption period
-Your total process may last up to one year
-If you cannot pay after the redemption period:
-The lender may take title to the property, or
-Sell the property and pursue a deficiency judgment for any shortfall

You also have:
-The right to redeem right up until the final order
-The ability to request an extension for financing even if the redemption period has expired
-The right to appeal if the legal principles were incorrectly applied
-Once the final order is granted and the appeal window closes, your rights are fully extinguished.

Options If You Fall Behind
Homeowners have many tools available before and during foreclosure.

Financial Solutions:
-Reschedule or rewrite the debt
-Capitalize the amount owing
-Adjust the interest rate (lower in year 1, rising in later years)
-Move to graduated payments
-Change payment frequency (e.g., if you’re paid every 3 months, the mortgage can match that)
-Provide additional security such as, Art, Life insurance, Stocks or bonds ,Personal promissory notes (collateral security)
-Reduce the principal with family financial support (common for younger couples)

Property & Legal Option:
-Sell your goods
-Sell your property
-Allow the lender to accelerate the mortgage
-Enter receivership
-Become a tenant under an attornment clause
-Allow the lender to take possession
-Face potential legal action for personal covenant (borrower remains personally liable)

Court Options:
You may provide evidence of your intent to pay, and the court may grant anywhere from 1 day to 1 year of extra time.

How Sales Work
If the lender moves to sell the property, sales may occur by:
-Tender
-Public auction
-Private agreement between the lender and a buyer

The court supervises the sale, ensuring notices are sent to you and any second or third mortgage holders. If the lender did not approve a past transfer or mortgage assumption, they may sue previous owners. It’s extremely important to obtain a written release from the lender in all such situations.

Quit Claim Option
A homeowner may choose to give the property back to the lender through a Quit Claim. This:
-Avoids going to court
-Prevents emotional stress
-For some homeowners, this is the cleanest exit.

Final Takeaway
Foreclosure is serious, but it is not immediate and not hopeless. There are many opportunities to negotiate, restructure, extend timelines, and protect your financial future. The earlier you act, the more options you have. Ask yourself, “Is your home equity truly working for you?”. Forward this page if you, or someone you know, is going through foreclosure. Reach out; you and your loved ones don’t have to face this challenge alone; there are options available. We are here to help you, save your Home, if you are going through a Foreclosure process. Sunil Pala is an experienced and knowledgeable Mortgage Broker takes the will take the STRESS off your mind.