How To Stop Foreclosure in Calgary, Alberta

How to Stop the Foreclosure Process in Alberta

I’m Drew Allum, a real estate advisor at Redline Real Estate Group and with the
Calgary home sale team. I work alot with people who have to sell their homes quickly. I had a chance to sit down with Scott Bollinger, lawyer at Bollinger & Associates to look into one of the most important topics we’ve been getting comments on. It’s the foreclosure process in Alberta and what you can do in case you find you have to stop the foreclosure process in Calgary. If you’re in a default or in danger of falling into default on your mortgage you can protect yourself by learning the options available in Alberta. Here’s Scott’s advice if you find yourself pending foreclosure.

Arrange to Make Your Payments

First option from Scott is the most obvious answer. Just make your payments and keep your promises to the bank. I know that’s not always possible but if you can find a way to consolidate debt and lower your payments elsewhere you can free up cash to get you back on track. That’s the easiest solution. You should also know that if you have a problem or if you foresee a problem lenders will often work with you. They are usually willing to negotiate an alternative payment schedule. Sometimes they’ll be able to consolidate the other debts so that you can reduce your overall monthly payments. If you have enough equity in your home you may even be able borrow against the home with a 2nd mortgage to cover the outstanding payments. Note this will get you into further debt and should only be looked upon as a short term solution. 2nd mortgages usually come with higher interest rates so your monthly payments moving forward will be higher. If you find yourself in a position where making the payments is just no longer possible, or getting yourself into further debt to save the home aren’t recommended, there are a few other options as well.

Do Nothing….Easy, But It Will Create Other Problems!

It’s definitely not the wisest choice but you could just do nothing. I know that might seem counterintuitive, but it is an option and you can sit back and let the foreclosure process take place. Doing nothing is definitely the easiest thing to do but it will eventually result in the loss of your home and a massive hit to your credit rating. The bank will take back your home, have you vacate the premises and attempt to resell it to recoup their investment. The process typically in Alberta takes between three months and a year; usually six months to a year on residential property so you’re not going to be kicked out overnight but you will eventually have to move out of your house and you’ll lose everything including your credit rating if you decide to do nothing. You’ll then have to look into credit repair strategies over the next few years if you decide to ever buy another home, car, or any other items that require credit.

Plead Your Case to the Courts

Another option would be to go to court and plead your case. Ultimately you could let the foreclosure process commence and then you could fight it. You could try to negotiate with the bank at that point too but according to Scott it’s very unlikely to be successful. It’s not what most lawyers or real estate professionals would advise simply because it’s pretty cut-and-dried in a contract situation. You’ve made a promise to make your payments on your mortgage agreement, and you’re now unable to fulfill your promise. If you have extenuating circumstances, it may be worth a shot. Ask a lawyer if that option makes sense in your case.

Selling Your House – options

If you want to try to avoid that foreclosure process and save your credit rating, the next option is to try to sell the property before the actual process commences, or even within the redemption period which could be up to six months. If you have gotten a demand letter or a reminder from the bank and you don’t think that you can deal with handling the arrears and making your payment’s going forward you may want to turn your mind to selling that property as quickly as possible and obviously for enough to cover the debts that you owe.

Hire An Experienced Agent

One of the ways you can sell it is to hire an agent. Remember, often in these situations you’re under time constraints. Contact the bank immediately and let them know that you will be selling the home to pay off your outstanding debts. Ask them for a mortgage payout statement to calculate exactly how much you owe in late payments, any payout penalties, and the balance of the mortgage. When selling through your agent you have to make sure that that home is priced competitively. The major issue is there’s no guarantee that there’s a buyer for your home at the price you are asking. If there is no sale, the bank will continue with the foreclosure process and you are back to square one. Get the advice of a seasoned professional who has experience with both buyer and sellers in your community and who can give you a realistic timeframe on how long similar homes in the area are taking to sell today. Review how much the sale would cost in agent fees, legal costs and penalties to the bank. If you have enough equity in your home to pay all of these off once you find a buyer, you stand a good chance of saving your credit.

Sell Your House Fast to An Investor

On the other end, if the amount of time for you is limited and/or you don’t want the headache of the home anymore, another option would be to sell to an investor, or the ‘direct buy’ option. There are groups and investors out there that will buy your property directly from you. Services that advertise ‘We Buy Houses in Calgary’ or ‘Sell My House Fast in Calgary’ can help you sell the Calgary home fast. They offer more certainty and a quicker close. Note they often need to acquire the home for somewhat of a deal but the offers are generally made in cash and they cover all the outstanding costs, including your legal fees. Once those debts are paid off, you are left with the balance of the equity from the agreed upon sale price and your credit again remains in tact. Creative options are possible if your home can’t sell due to low equity. The investor may offer to buy your home by way of ‘agreement for sale’ which is some cash upfront and then take over the maintenance of the property for a period of time. They close on the home down the road as more of the mortgage gets a chance to be paid down.

Get The Answers For Your Situation

In each case, it’s important that if you find yourself in a potential foreclosure situation that you don’t wait! Make sure that you contact your lender and notify them about the difficulty you’re having. See if there is an option available to slow the process. Get in contact with the right people and the professionals to find out the answers to your questions. Foreclosure is one of the most stressful things that can happen to an individual or family. You need to understand your options in order for you to keep control of the process and minimize your stress.

If you have any questions feel free to drop us a comment or click on the link to go directly to Scott and his team over at Bollinger & Associates. If you have a foreclosure pending and need to sell your house fast in Calgary, contact us now at the link below and let us know your situation. We’ll take an in-depth look at your case and provide you with as many options as possible including a cash offer for your home. Whether you need to know how much you can get for your home through a traditional sale, including how long that process may take in your community, connecting you with our list of buyers who buy houses in Calgary, or if you are interested in just receiving a cash offer for the house today, we can help! Contact us now and get the solution that’s right for you.

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