Foreclosures in Alberta are common. High unemployment rate and low average median incomes are two significant factors contributing to this scenario. As of August 2021, Alberta had more than five hundred and ninety-six thousand mortgages. And over two thousand nine hundred of these mortgages resulted in arrears.
Yet, several residents know very little about the Alberta foreclosure process, resulting in cluelessness when faced with the situation. Moreover, the lack of knowledge becomes a barrier for them to deal with the foreclosure issue effectively.
If you are apprehensive about the foreclosure process and want to examine the steps in the process of foreclosure in the Canadian province of Alberta, scroll below:
The process of foreclosure in Alberta generally consists of the following steps.
Step 1: Initial contact
The first thing in the foreclosure process is that the lenders will contact and issue a notice when borrowers fall behind on a mortgage payment. Different lenders have different methods of communicating this to the homeowners. Some may call the borrowers, while others may send an official letter notifying them of the missed payment.
What is essential is not to ignore this notice. Otherwise, the borrowers may have to face the consequences. For instance, certain mortgages in Alberta have a provision wherein the default is a past, one-time issue and is due to a situational crisis. Usually, missed payments (NSF) carry a financial penalty ranging from $50 to $150.
Step 2: Demand letter
In Alberta, a demand letter is more formal than the initial contact and is usually sent after the borrower misses two or more payments. It can be sent by the lender, an attorney, or even a collection agency. The letter expressly states that if the due is not cleared within the stipulated time, the lender will begin foreclosure proceedings on the property.
If foreclosure proceedings are made, then the appraisal is done by the lenders in Alberta. They usually make a drive-by appraisal by just looking at the outside of the house. Lenders who take the time to consider the interiors as well may give a higher estimate than one resulting from a drive-by.
Step 3: Foreclosure claim
Lastly, the Alberta foreclosure process involves a statement of claim filed by licensed attorneys in the Court of Queen’s Bench. Following this, the lawyer files a notice on the property title, stating the lender’s intention to secure it and reclaim the property. This notice enables other lenders on the title to understand that foreclosure proceedings have been started.
Facing foreclosure is regrettable news for Alberta homebuyers, as they are often liable to pay lawyer fees and other process costs.
What options do borrowers have?
Many folks do not respond to any of the notices sent to them by the lender concerning pending payments. But waiting things out may not always be the best possible solution. Instead, it may lead to more problems.
It is advisable to contact a reliable Alberta lawyer to handle your foreclosure matter with professional expertise. Alternatively, many homebuyers contact a real estate lawyer and get their agency to buy out the property and help them settle the dues. Many of these agencies even repair damaged properties and resell them, giving homeowners an excellent way out of a complex situation.