Sandy’s Point Of View

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Foreclosure is the legal and professional proceeding in which a mortgagee, or other lienholder, usually a lender, obtains a court ordered termination of a mortgagor’s equitable right of redemption. Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt. While this equitable right exists, the lender cannot be sure that it can successfully repossess the property, thus the lender seeks to foreclose the equitable right of redemption. Other lienholders can also foreclose the owner’s right of redemption for other debts, such as for overdue taxes, unpaid contractors’ bills or overdue HOA dues or assessments.

The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property (immovable property) after the owner has failed to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust”. Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that “the lender has foreclosed its mortgage or lien”. If the promissory note was made with a recourse clause then if the sale does not bring enough to pay the existing balance of principal and fees the mortgagee can file a claim for a deficiency judgement.

Home buyers who want a good deal in real estate invariably think first about pursuing foreclosures. Buyers have this picture in their mind of a cute little house, surrounded by a white picket fence that is owned by a widowed mom who fell on hard times, but that scenario is generally far from reality.

Why Do Sellers Go Into Foreclosure?

Sellers stop making payments for a host of reasons. Few choose to go into foreclosure voluntarily. It’s often an unpredictable result from one of the following:

• Laid-off, fired or quit job
• Inability to continue working due to medical conditions
• Excessive debt and mounting bill obligations
• Squabbles with co-owner, divorce
• Job transfer to another state

Buying a Home at the Trustee’s Sale

Check with your local county office to find out how sales in your area are handled, but common threads among those I see in are:

• No loan contingency
• Sealed bids
• Proof of financial qualifications
• Sizeable earnest money deposits
• Purchase property “as is”

Sometimes buyers are not allowed to inspect the house before making an offer. The problem with buying a house sight unseen is you can’t calculate how much it will cost to improve the structure or bring it up to habitable standards. Nor do you know if the occupant will retaliate and destroy the interior. On top of that, you may need to evict the tenant or owner from the premises after you receive title, and eviction processes can be costly.

Here is a video about how to fight foreclosure:

One of the last ways you can fight foreclosure is to make them produce the note. In many cases the note is sitting in a warehouse somewhere and nobody knows or cares where it is.

Collected and reviewed by Sandy Hutchens.

Tags: borrower, debt, foreclose, Foreclosure, HOA, Home, house, Lender, loan, Mortgage, mortgagee, note, owner, property, redemption, right, Sandy Hutchens
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Buying a home is one of the biggest decisions you’ll ever make. So when it comes time to signing on the dotted line, make sure you don’t make that decision alone.

To help you put together the right team of professionals, says Sandy Hutchens, Canada Mortgage and Housing Corporation (CMHC) offers the following who’s who list of experts and what they should bring to the table:

• Real estate agent. Among other services, your real estate agent will help you find a home, write an Offer of Purchase, negotiate a purchase on your behalf and save you a considerable amount of time, trouble and headaches. When choosing the agent you want to work with, ask for references and don’t be afraid to ask questions or call your local real estate association for advice.
• Lender or mortgage broker. Many different institutions lend money for mortgages, including banks, trust companies, credit unions, caisses populaires, pension funds, insurance companies and finance companies. It can be a good idea to shop around and speak with more than one lender before you make a choice. Many Canadians choose to work with a mortgage broker because they don’t represent any specific lending institution. They can often help you find a mortgage with terms and rates that will suit your needs.
• Lawyer (or notary in Québec). A lawyer can protect your legal interests by ensuring the property is clear of liens, charges or clean-up orders  and will review all contracts before you sign them and your Offer (or Agreement) to Purchase. Make sure your lawyer or notary is a licensed, full-time professional who understands the local laws and regulations, has reasonable fees and can explain things to you in plain language.
• Home inspector. When considering purchasing a home, you should hire a knowledgeable and professional home inspector. He or she will be able to tell you if something in the home is not functioning properly, what repairs need to be done and whether there may have been any problems in the past.
• Insurance broker. An insurance broker can help you purchase property and mortgage life insurance. Your lender can also help you with mortgage life insurance.
• Appraiser. An appraiser will assess your property’s worth and help protect you from paying too much.
• Land surveyor. You may need the services of a land surveyor if the seller does not have a current Survey or Certificate of Location.

For more information on putting together your home buying team and on other factors associated with buying a home, call CMHC at 1-800-668-2642. For more than 60 years, says Sandy Hutchens, CMHC has been Canada’s national housing agency and a source of objective, reliable housing expertise. This CMHC report was reviewed by Sandy Hutchens.

Tags: agent, broker, Canada, Canada Mortgage and Housing Corporation, CMHC, Housing, insurance, lawyer, Lender, Mortgage, Ontario, property, purchase, Sandy Hutchens
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