No one plans for a foreclosure, but unfortunately over 4.6 million Canadians are currently either at risk for foreclosure or going through the dreadful process. When faced with a foreclosure, the stress and shock can make it easy to make a mistake that could cost you your home. If you want to keep your debt from taking your house, it's vital to avoid making these common errors that can ruin your foreclosure case.
Ignoring Your Lender's Notifications
Usually at least a month before foreclosing, the institution responsible for your mortgage will begin to send out notifications of missed payments. If you don't want to keep your home, responding to these messages should be the last thing on your mind.
People who have never been in debt before are often intimidated by lending agencies and try to avoid facing debt by not replying to bills and late notices. However, if you get in touch with the lender, you could find them more human than you expect. Agencies might be able to refinance your mortgage with more suitable terms and smaller payments, which would enable you to pay less per month and avoid losing your home. Some may even even give you a grace period to make up your missed payments if you can demonstrate hardship to them.
As added salt in the wound, if you don't respond to notices, you could be opening yourself up for criticism at your foreclosure hearing. If the lending institution can demonstrate that you never spoke to them or attempted to repay your loan, they'll be in a stronger position to demand the quick sale of your property. Even if they refuse to help you pay back your mortgage, calling and negotiating with them will help shine a better light on your when your hearing rolls around. And speaking of your hearing...
Not Showing Up In Court
Once your debt has reached the default stage and your lending agency wants to foreclose, it must file an order nisi with the court in order to begin proceedings. The court will then serve you with a summons to appear at a hearing, typically at least 7 days from the day of filing. At this hearing, the judge will examine the details of your foreclosure case as told by you and your lending agency. If you fail to show up, the judge will only have one side of the story, and this could cause some big problems for you if you want to keep your home;
During each foreclosure hearing, the judge determines how long the period of redemption will be for the homeowner. This period is the amount of time you will have to pay back whatever you have left on your loan, including fees and taxes. If you appear in court, you can give the judge your side of the story and possible convince him or her to grant you a lenient repayment period on your loan.
On the other hand, if the judge is only presented with the lender's side of the case, he or she may be likely to give you a much shorter redemption period. In some cases, if you have made no attempt to repay and you don't appear in court, the judge can order your house to be sold on the same day as the order nisi is filed -- unless you repay the loan right away.
Overlooking Legal Counsel
While foreclosure can seem like an entirely financial matter, some cases can actually be fought with the help of a skilled real estate lawyer. Even if it's true that you've fallen behind on payments, it's also possible for some aspects of your case to be violating the law without your knowledge.
For example, some foreclosures can be put on hold due to a missing promissory note. This typically happens when a lender sells your debt to another business. Along with your debt, the lender also sells the right to claim payments, meaning the holder of your promissory note is the only person who can file for a foreclosure against you. If your lender doesn't have the note, a good attorney may be able to reverse your case.
Foreclosures can have other issues too, like paperwork errors and predatory lending policies going back to when the loan was given. If you don't ask a real estate law expert to review your case, you may be missing out on ways to delay payment or have the order overturned completely.