Foreclosure – No Good, But Bad & Ugly

The thought of going into foreclosure can be a real heart stopper. You’ve worked hard to save up a down payment, you’ve committed to getting out of the rental market and you’ve strived to create a home for yourself and your family.

Now, the very real possibility that this will all be gone, all could be taken away from you, is very real.

You’d think that is the bad part, but if you end up going all the way through a foreclosure it can actually get much more ugly!

You suddenly find yourself scrambling for a new place to live, your credit is shot for potentially seven years and it feels like you’re starting over. And if your mortgage just happened to be insured and values have dropped there is a very real chance they could come after you for any shortfall!

Yet It Doesn’t Have To Be All Bad

I know, we’ve painted a pretty bleak picture and often when the economy is down, your struggling to find work or you have other issues going on it looks like there really isn’t any light at the end of the tunnel.

Yet until you’re out of your home there may still be options that can prevent much of the bad and ugly of a foreclosure from ever happening. That’s why understanding the steps involved with a foreclosure are so important.

Once you know the steps, you can determine where you are in the process and react accordingly.

If you’re simply a few payments behind there may be options to contact the lender directly and ask them what can be done to make this work. You may be able to defer a few payments and have them added to the end of the term, if there is sufficient equity in the property there may be an option for a refinance or there could be options to extend the amortization length of the mortgage to reduce the monthly payments.

If you’re at the point that you’ve received the Statement of Claim you’ve lost the option of negotiating with the banks as the process has now moved into the lawyer’s hands, but again, not all is lost.

At this point you still have the right to sell your property and whether this is a straight MLS sale (if you have enough equity) or a creative solution through someone like ourselves ( rent to own options, straight buyout or working together when properties are under water or over-leveraged) it still gives you choices.

Depending on the amount of actual equity you may have a multitude of options and even an extended amount of time, as long as you take action. And I can’t stress this enough, if you don’t understand the steps, you probably won’t understand your options.

Taking Action

We’ve been on the verge of foreclosure ourselves, we learned the process and we learned what works. We’ve also helped multiple homeowners going through the process and everyone who has come through the process with minimal pain has consistently done one thing.

Taken Action…

Whether it’s simply to become informed, whether it’s making the necessary court appearances or doing the extra leg work to get new financing or even simply listing the property for sale, taking that action has made foreclosure far less painful and far easier to deal with.

I’ve been to foreclosure court and I’ve seen the judge award properties to the banks lawyers all because the homeowner stuck their head in the sand and didn’t make an appearance to defend their situation.

I’ve also seen homeowners appear in front of the judge with no documentation, no clearly laid out plan and no options that would allow the judge to provide them more time. Don’t be that homeowner!

Where To Start

To help you get started, Canada Home buyer has come up with a handy system to walk you through this that use the acronym T.E.A.C.H.

Let’s break down the TEACH system for you.

T– Take Action

You need to take action. I can’t tell you how many people we’ve seen who end up losing their homes, their credit and much more simply because they gave up and didn’t take action.

Understand that without doing anything you are leaving it in the hands of the lawyers and the legal system and this typically is set up to benefit the banks, not you!

So your first action step is…

E -Educate Yourself

We’re a bit biased, but our recommendation would be to get educated about the process. So to help with that, we’ve put together a guide we give away explaining the steps of foreclosure, that explains some of the legal terms that will show up as you go through foreclosure and even lists some action steps to take along the way.

Start finding out how you can survive through the foreclosure process by following this link,

Understanding The Alberta Foreclosure Process

From there, your next step is determining where you are in the process and…

A – Act Accordingly

As I went over earlier, depending on where you are in the process you have different options and different people you can deal with. Whether it’s negotiating with the bank, dealing with a Realtor, seeing how we can help (and we can help with all these options) or simply preparing for a hearing, you need to act and prepare accordingly.

And part of that includes being able to…

C– Control Where Your Foreclosure Is Heading

If you sit idly by, you will get passed by. But if you start stickhandling the process due to your being more educated about it you can control where it goes.

This works hand in hand with the final step…

H – Have An End Result In Mind

If you realistically understand your options you can use this knowledge to control your foreclosure situation and point yourself towards an end result.

I have to be painfully blunt again here, if you have lost your job, you have no income and there is minimal equity in your property you need to understand your end result is going to be extremely different from someone who is working and who has lots of equity, but with expenses that are simply too high to keep up.

Ultimately your end result has to work with your situation and again that’s where contacting a third party like ourselves can work towards helping you determine the best options.

Hopefully this has given you pause for thought and provided some ideas, thoughts and a rough plan allowing you to move forward. By using the TEACH system you can start helping yourself to move forward with your foreclosure situation and if you want to contact us to find out even more options, simply fill out the handy contact form below!