Receiving foreclosure documents can be stressful and overwhelming. While every situation is different, understanding the process and your options can help you make informed decisions and avoid costly mistakes.

Understanding the Documents:

Depending on where the lender is in the process, you may receive one or more of the following:

1. Demand Letter from the Lender

   Often, the first indication of a problem is a demand letter from your lender. This letter typically advises that you are in default under your mortgage and specifies the amount required to bring the mortgage back into good standing. It may also provide a deadline before legal action is commenced.

2. Foreclosure Petition

   If the lender has started court proceedings, you may receive a Petition filed in the Supreme Court of British Columbia. The Petition sets out the lender’s claim and requests various foreclosure-related orders from the court. This typically comes in a package from the Land Titles Office.

3. Certificate of Pending Litigation (CPL)

   A CPL is commonly registered against the title to the property once foreclosure proceedings have been commenced. This alerts potential purchasers and lenders that there is ongoing litigation affecting the property.

4. Other Court Documents

   You may also receive affidavits and other supporting materials filed by the lender. These documents often contain details regarding the mortgage, payment history, amounts owing, and the lender’s requested relief. If you are formally served, this may start the timeline to file a Response to Petition.

What are your Options?

Every foreclosure is unique, but common options include:

1. Bringing the Mortgage Back Into Good Standing

   In some cases, it may be possible to pay the arrears and costs necessary to cure the default and stop the foreclosure process.

2. Refinancing

   Borrowers sometimes obtain financing from another lender to pay out the existing mortgage. This can provide additional time and flexibility, particularly where the borrower has equity in the property.

3. Selling the Property

   Many homeowners choose to list the property for sale during the foreclosure process. In many cases, selling the property yourself will result in a higher sale price than a court-ordered sale and may preserve more of your equity.

4. Negotiating With the Lender

   Lenders are often willing to discuss repayment arrangements, extensions, or other solutions where there is a realistic plan to resolve the arrears. Early communication is usually beneficial.

5. Disputing the Foreclosure

   While many foreclosures proceed on relatively straightforward mortgage defaults, there are circumstances where a borrower may dispute some or all of the lender’s claim. Whether a dispute exists will depend on the specific facts of your case.

6. Allowing the Process to Proceed

   In some situations, allowing the foreclosure process to continue may be the most practical option. If the property is sold and there is money remaining after payment of the mortgage, property taxes, and other registered charges, the remaining proceeds are generally paid into court and may be claimed by those entitled to them.

The Foreclosure ProceSS:

1. Initial Court Proceedings

   Once served with foreclosure documents, it is important to obtain legal advice promptly. There are deadlines that may apply, and the appropriate response will depend on your circumstances and objectives.

   In some cases, it may be appropriate to file a Response to Petition. In others, a negotiated resolution may be pursued without contesting the proceeding. Early advice can help determine the best course of action.

2. Order Nisi

   The first significant court order in most foreclosure proceedings is the Order Nisi.

   Among other things, the Order Nisi:

   • confirms the amount owing under the mortgage;
   • sets the lender’s costs;
   • establishes a redemption period; and
   • sets out the rights of the parties moving forward.

   The redemption period is the time during which the borrower can redeem the mortgage, typically by refinancing, selling the property, or otherwise paying out the debt.

   While six months is common in many residential foreclosure matters, the court has discretion to order a shorter or longer redemption period depending on the circumstances.

3. Court-Ordered Sale

   If the mortgage is not redeemed during the redemption period, the lender will often seek conduct of sale and market the property through a court-approved process.

   Because court-ordered sales involve additional procedural requirements and are generally conducted on an “as is, where is” basis, they may not achieve the same result as a conventional sale. For that reason, borrowers who have equity often prefer to market the property themselves during the redemption period where possible.

4. Order Absolute

   In some circumstances, a lender may seek an Order Absolute, which transfers ownership of the property to the lender in satisfaction of the mortgage debt.

   Order Absolute is generally more common where there is little or no equity in the property. Whether it is available will depend on the circumstances of the particular case.

How We Can Help:

Foreclosure proceedings involve strict timelines and significant financial consequences. Obtaining legal advice early can often provide more options and more time to develop a plan.

Our foreclosure team assists borrowers with:

• reviewing foreclosure documents;
• advising on available options;
• communicating and negotiating with lenders;
• refinancing and sale strategies;
• responding to court proceedings;
• attending court appearances; and
• protecting equity in the property where possible.

We understand that many people facing foreclosure are already under financial pressure. Where appropriate, we can discuss limited-scope or “unbundled” legal services, allowing you to receive legal advice and assistance while managing certain aspects of the process yourself.

To book a consultation, please contact our foreclosure team at 604.853.0774.