Alberta is Canada’s fourth-largest province, with a population of 4,421,876. The province has registered an increase in foreclosures in recent years. Foreclosures refer to the action of taking possession of the mortgaged property when the mortgagor is unable to make loan repayments.
If you’re facing foreclosure, you will want to know what you can do to stop it.
When Does the Foreclosure Process Start?
In most loan repayment models, the monthly installment is due on the 1st day of the month. However, most lenders give borrowers a 15-day grace period, and you can make payment by the 15th of the month.
If you do not pay the delayed monthly installment, the lender levies a late fee and sends you a notice of missed payment. If you do not make any payment for two months, the lender issues a demand letter. It is the beginning of the foreclosure process Alberta. Here are detailed steps to stop it.
Don’t Wait For the Demand Letter
According to a Global news report, foreclosures in Alberta have increased by 25% annually. The demand letter is generally the first step of foreclosures. The demand letter is considered unnecessary as borrowers already know they have defaulted on the mortgage. However, most lenders still send a letter to the mortgagor.
The demand letter may come from an attorney who provides service to the lender or collection agency. It mentions that the mortgagor needs to make two payments in full to prevent foreclosure.
Make all your Defaulted Payments
As per Alberta Justice and Solicitor General data, there were 220 foreclosures in 2018-2019. The best way to stop the foreclosure process in Alberta is to make defaulted payments as early as possible. It is always good to speak to the lender and explain that you intend to make the defaulted payments soon.
Negotiate With the Lender
If you are troubled financially and cannot make defaulted payments immediately, you need to negotiate a new payment plan with the lender. As per the latest data, there were around 219 foreclosure claims by the end of November 2020.
However, you will be surprised to know most lenders are willing to negotiate with the buyer for a new payment plan instead of foreclosing the mortgaged property. They would rather recover their payments late and allow you to keep your home than evict you and try to recoup their losses by selling it.
In fact, some lenders offer two options to borrowers: the Repayment option and the Payment Plan modification. In the repayment option, you agree to continue to make future mortgage payments as initially agreed. However, you may need to pay some additional payments to cover missed payments.
For instance, suppose you were making a $1500 payment earlier; you will need to make a $2000 payment instead. The additional $500 is adjusted with the missed payments.
In payment plan modification, the lender will lower the monthly mortgage payment that will allow you to make the payments more efficiently. The lender will also extend the payment period to help you keep up with mortgage payments.