The word foreclosure means â€œto deprive a borrower [in default] of the right to redeem the mortgaged property.â€ In British Columbia, the foreclosure process it is a Judicial Sale.
Foreclosure Process in British Columbia
It is also an extinguishment. In legal terms, this means to pay off and satisfy in full, or to nullify. In a sense, a foreclosure is like a divorce proceeding, where the borrower and the lender become divorced under the mortgage terms. All of the foreclosures in British Columbia are subject to Judicial Sale proceedings. The lender can apply to the British Columbia Supreme Court for a judicial sale, also known as Court-ordered sale, which will then be carried out under strict Court orders.
Being a Canadian real estate investor, it is important to know the whole process so that a real estate investor can assist the panicked property owner, as well as the lender to resolve the default.
The Order Nisi serves to establish the time of redemption. The redemption period is the time period in which the property-owner can redeem the mortgage, as well as the amount required. The redemption period is usually set at six months. There are exceptions where the redemption period can be reduced to one single day, subject to the approval of the Courts.
When a lender applies for an Order Nisi, they will apprise the Court of the current value of the property, and ensure that it is high enough to satisfy the cost of the sale and claim off the property-owner. If the property is sold by the Courts, the lender is entitled to recover the difference between the sale proceeds and the mortgage debt from the property-owner.
Once a lender has been granted a conduct of sale, they act in the role of the lender pursuant to the Court order, solely for the disposition of the assets. They also have the right to list the property with a realtor on MLS.
When a potential buyer wants to make an offer through the realtor, the offer is prepared and directed at one of the lenders. At that point, the realtor confirms that the potential buyer will be negotiating with the lender, and the deal may be possible once the offer is also presented in the Courts. The offer can be subject to a sealed bid process.
The foreclosure process in British Columbia can be very complex, time-consuming, and very expensive for all the parties concerned.