Once a foreclosure begins, can it be stopped? The answer is yes. In fact, the Canadian legal environment makes it relatively easy for a homeowner to stop foreclosure once it has begun — provided they can come up with the money to pay off the mortgage.
However, the foreclosure process tends to favour the borrower (i.e., you as a homeowner) provided you can collect the money needed to pay off the debt. Once a court has made an Order for Foreclosure, the only way to get the house back is to buy it from the lender. Generally, midway through the foreclosure process the Court will grant what is called a Redemption Order, giving you some time (usually 6 months) to get together the money needed to make the payments the Court says you must make. If you can do this, the foreclosure process will stop and you will be able to keep the property.
It is important to understand that, while people use the term “foreclosure” as a generic term for what happens when someone defaults on a mortgage, not all provinces use a judicial foreclosure to recover a lender’s money. Foreclosures or Judicial Sales are used mainly in British Columbia, Alberta, Manitoba, Saskatchewan, Quebec, and Nova Scotia.
On the other hand, if your property is located in Newfoundland and Labrador, New Brunswick, Ontario, or Prince Edward Island, the lender will likely use what is called a Power of Sale. In this process, the window of time for stopping the process is much shorter. With a Power of Sale, you generally only have 35 days to pay off the mortgage, compared with 6 months for foreclosure.
Foreclosures are a long and involved process. The bank or lender would generally rather find another way to collect their money. Therefore, it is worth contacting them to try and negotiate an alternate payment plan that will let you get the mortgage back on track. Only if this is not possible — or if they do not hear from you — will they proceed with foreclosure.
You can usually halt a foreclosure or Power of Sale in the early stages provided you can come up with the money needed to pay off a foreclosure. Unfortunately, this can be very difficult to do if your finances are in disarray — which is very common in homeowners facing foreclosure. At this point few traditional lenders will be willing to write a new mortgage, since it would be easier for you to pay off the existing one if that were possible.
How To Reverse Mortgage Foreclosure?
This is where alternative lending programs such as HOS Financial come in. These programs specialize in connecting homeowners with private lenders who are willing to provide alternative financing to pay back the mortgage immediately and stop foreclosure. This gives you a window of several years to get your finances back in order and move to a traditional mortgage again.
Rather than facing the serious disadvantages of a foreclosure on your credit report (which can keep you from getting traditional mortgage for the next 6 years) you will pay a private lender for the next few years and then smoothly transition back to a traditional mortgage when you can afford it.
The HOS Financial program also includes something even more important than financing — it includes credit counselling. Since one of the reasons you are facing foreclosure is the inability to get alternative financing, this will ensure you do not find yourself in such a bad situation again.
There are two main criteria for eligibility in the HOS Financial program. If you have at least 10% equity in your home and a steady source of income, and you would like to avoid the serious disadvantages of a foreclosure, contact HOS Financial today to learn more about how they can help you.
Foreclosure Redemption Period
Provided the homeowner has decided to take an active role in the foreclosure (by filing a Demand for Notice or a Statement of Defense in the 20 day period after the foreclosure action started) the court will usually grant a Redemption Order early in the process.
This Redemption Order gives the homeowner a specified time to pay the outstanding mortgage debt or, usually, bring the mortgage current. The court will usually give the homeowner 6 months to do this, but the time may be extended (if the homeowner persuades the court to do so) or reduced (if the lender or bank persuades the court to do so).
Provided the owner makes all the payments the court say must be made in this time period, the foreclosure process will be stopped and the owner will keep the home.
The key here is that the owner must make the mandated payments within the specified time. For many homeowners facing foreclosure, one of the reasons they are doing so is because they cannot come up with alternative financing to pay the mortgage. If their finances are in disarray, traditional lenders will often refuse to come in and close the gap.
The situation is even worse for homeowners who have what is known as “orphaned” mortgages. These homeowners have sub-prime credit already, but were able to obtain a sub-prime mortgage in the years before the financial crisis. Now, thanks to the crisis, many sub-prime lenders have stopped doing business in Canada and are calling in their loans. The homeowners must pay the balance of the mortgage now — or lose their homes. And, since they have sub-prime credit, no traditional lender will write them a new mortgage.
How To Stop Foreclosure On My Home:
Fortunately, there are other ways even homeowners with sub-prime credit can pay off the mortgage and stop foreclosure. Firms like HOS Financial offer programs designed to connect homeowners with private lenders and investors, who are willing to loan out money regardless of a homeowner’s credit score. In fact, these private lenders are usually able to work much faster than any traditional bank, so they can write a loan in a few days or weeks. This means they can take fast action to stop foreclosure now. However, the HOS Financial programs do not stop here.
Part and parcel of the HOS Financial approach is credit counselling so that homeowners do not have to worry about facing foreclosure again. The fact is, many homeowners with poor credit who are facing foreclosure are in this position because they were not able to find traditional financing. Even if they can stop foreclosure now, they will be at risk of falling into the same trap again in the future — because the real problem is their credit score or credit worthiness a viewed by Traditional Mortgage Lenders.
The HOS Financial programs are available to homeowners who want to stop foreclosure or power of sale regardless of their current credit rating. The primary requirements are that the homeowner has a regular source of income and that they have at least 10% equity in their home. If you meet these criteria and want to stop foreclosure, contact HOS Financial now.