Power of
Sale vs. Foreclosure
Pre-foreclosures
and pre-power of sale properties in
Canada are not public record so they are harder
to find. Some foreclosure web sites in
Canada will ask for your information so that
they can send you a property list and marketing information. Some are clubs that
you pay a fee in order to get lists and advice. In addition some real estate
clubs offer special classes and courses.
Your real estate agent can search for power of sale and foreclosures as they
list on MLS, but there is usually a lot of competition for the newest listings
(flippers, builders, etc.) and some may require extensive work. Try contacting
your local branch manager, sometimes banks will supply foreclosures and power of
sale listings for free.
Lenders can do a Foreclosure or a Power of Sale depending on province. Most
lenders don't want to foreclose as the expenses are extremely high.
Foreclosure:
·
The lender becomes the owner of the property
·
The lender pays any outstanding property taxes
·
Lender must insure the property
·
Lender must pay Land Transfer Tax
·
Almost the only option when the property is
partially renovated or abandoned
·
Lender loses any right to the shortfall (if any)
on the mortgage
Steps to Foreclose:
1.
One day after late payment Lender can file a demand for
payment (most wait for a month or two)
2.
After 10 days from the demand they can file a proceeding
3.
Then the must service the owner and that can take up to
a year if they have trouble finding them.
4.
In court they can request an Order for
Sale or Order Absolute (Foreclosure)
5.
Then the property can be listed.
Power of
Sale:
1.
In
Ontario they can expedite the process via power of sale.
2.
15 day period from default and a notice of sale can be
issued.
3.
Owner then has 35 days to come up with the money.
4.
Lender then files a statement of claim for Possession.
5.
Owner has 20 days to put in a claim of defence.
6.
Judgement for Possession follows and eviction.
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