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What is the court process for a foreclosure?

by Guest786  |  6 years, 7 month(s) ago

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What is the court process for a foreclosure?

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  1. Guest787

     A foreclosure action starts in the same way that other lawsuits do: the Plaintiff (the bank) files and serves a Statement of Claim (which starts the lawsuit and sets out the facts on which the claim is based) against the Defendant (the landlord).

    The landlord then has 20 days in which to file and serve a Statement of Defence or Demand for Notice. If the landlord does not do either of these things within 20 days, then the Plaintiff can note the Defendant in default. This basically means that the bank is telling the Court that the landlord is not fighting or defending the claim.

    Once these steps are over, the bank must file an Affidavit of Value (which includes an appraisal that sets out the current fair market value of the property) and an Affidavit of Default (which includes the amount owing on the mortgage, the amount in default, and other specific information). The bank can now apply to the Court for various remedies (for example, sale of the property). The Court will decide what to order based on the circumstances.

    Rarely, the Court will decide not to issue an order. This would occur, for example, when the Court finds that the landlord did not commit an act of default under the mortgage. This means that the bank had no grounds to sue the landlord.

    Usually, the Court will grant a Redemption Order. A Redemption Order will order that:

    • the landlord has a specified time to bring the mortgage current (in other words, the landlord has a specified amount of time to make all of the payments that the Court orders must be made); 
    • if the landlord does not pay all of the money within the time period, then the property will be offered for sale;
    • and the sale be done by a specified method. There are three usual methods:
    1. listing the property with a real estate agent; 
    2. advertising the property for sale in a newspaper or other publication; or 
    3. a posting at the courthouse.

    Sometime after the property has been listed, there will be another court application(s). If there are no valid offers from a third party on the property, then the bank will apply to become the legal owner. If there is a valid offer on the property, then the Court must approve and accept the offer and order that the property can be sold to the purchaser. If the Court does not accept an offer for whatever reason, then the property remains listed for sale. Basically, for the property to be sold, the Court must first approve the offer.

    Sometimes the Court will make an Order for Foreclosure or an Order for Sale to the Plaintiff. This will occur, for example, when the landlord has committed an act of default under the mortgage, and the Court does not believe that there is any way that the landlord can rectify (or fix) the default. For example, if the landlord has absolutely no money or other assets, is unemployed, and owes the bank over a year’s worth of mortgage payments, the Court might decide that there is no chance the landlord will be able redeem the mortgage. If the court makes an Order for Foreclosure, then the bank will become the owner of the property.

    Whether it is the bank or a third party that becomes the owner of the property, they will usually be entitled to possession of the property within 30 days. This means that if there is a tenant living in the property, the tenant will be served with a Court Order requiring them to move within 30 days. If the tenant does not move, then a Civil Enforcement Agency can be hired to force the tenant to leave the property.

     

  2. Guest787

     A foreclosure action starts in the same way that other lawsuits do: the Plaintiff (the bank) files and serves a Statement of Claim (which starts the lawsuit and sets out the facts on which the claim is based) against the Defendant (the landlord).

    The landlord then has 20 days in which to file and serve a Statement of Defence or Demand for Notice. If the landlord does not do either of these things within 20 days, then the Plaintiff can note the Defendant in default. This basically means that the bank is telling the Court that the landlord is not fighting or defending the claim.

    Once these steps are over, the bank must file an Affidavit of Value (which includes an appraisal that sets out the current fair market value of the property) and an Affidavit of Default (which includes the amount owing on the mortgage, the amount in default, and other specific information). The bank can now apply to the Court for various remedies (for example, sale of the property). The Court will decide what to order based on the circumstances.

    Rarely, the Court will decide not to issue an order. This would occur, for example, when the Court finds that the landlord did not commit an act of default under the mortgage. This means that the bank had no grounds to sue the landlord.

    Usually, the Court will grant a Redemption Order. A Redemption Order will order that:

    • the landlord has a specified time to bring the mortgage current (in other words, the landlord has a specified amount of time to make all of the payments that the Court orders must be made); 
    • if the landlord does not pay all of the money within the time period, then the property will be offered for sale;
    • and the sale be done by a specified method. There are three usual methods:
    1. listing the property with a real estate agent; 
    2. advertising the property for sale in a newspaper or other publication; or 
    3. a posting at the courthouse.

    Sometime after the property has been listed, there will be another court application(s). If there are no valid offers from a third party on the property, then the bank will apply to become the legal owner. If there is a valid offer on the property, then the Court must approve and accept the offer and order that the property can be sold to the purchaser. If the Court does not accept an offer for whatever reason, then the property remains listed for sale. Basically, for the property to be sold, the Court must first approve the offer.

    Sometimes the Court will make an Order for Foreclosure or an Order for Sale to the Plaintiff. This will occur, for example, when the landlord has committed an act of default under the mortgage, and the Court does not believe that there is any way that the landlord can rectify (or fix) the default. For example, if the landlord has absolutely no money or other assets, is unemployed, and owes the bank over a year’s worth of mortgage payments, the Court might decide that there is no chance the landlord will be able redeem the mortgage. If the court makes an Order for Foreclosure, then the bank will become the owner of the property.

    Whether it is the bank or a third party that becomes the owner of the property, they will usually be entitled to possession of the property within 30 days. This means that if there is a tenant living in the property, the tenant will be served with a Court Order requiring them to move within 30 days. If the tenant does not move, then a Civil Enforcement Agency can be hired to force the tenant to leave the property.

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