Sep
1
2009
There are two different ways in which lenders in Canada can recover on defaulted loans that result in foreclosures. Vancouver laws may differ from another region such as Ottawa or Ontario, and it is best to have an in depth knowledge and understanding of the laws for one’s own region. One way a lender will attempt to collect on a debt is by a judicial sale. These cases involve the lenders attaining authority granted through the court system, before selling the property, they must apply for the permission to do so and the court system remains extensively involved throughout the process.
The power of sale, requires no court involvement. The lender has been given the right in the existing mortgage documents that will allow them to auction off the house and recuperate their loss. This varies from province to province, as well as other laws surrounding the process of foreclosure. In New Burnswick, Prince Edward Island and Ontario, it is this power of sale system that is used. In Manitoba, Alberta and Quebec it is the judicial process that is enforced. And within these provinces, their own procedures vary as well.
The main difference is in the involvement of the courts, and in the beginning of the entire process. In the provinces wherein the power of sale is used, the home owner is sent a notice in the mail, stating that the lender has started the foreclosure. In the provinces wherein the judicial system is involved, a lawsuit filed against the home owner and anyone else involved who may have liability in the case starts the process. And in power of sale, the lender is just trying to recover the loan amount, usually this happens with the sale of the property, however with judicial provinces, the owner is sued by the borrower in a court of law.
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Tags: foreclosure, Vancouver