Foreclosure in Alberta – Legal Perspective

Talking With A Lawyer About Foreclosures

I recently had the pleasure of sitting down and chatting about Alberta Foreclosure with Barry McGuire, a long time real estate lawyer who practices in Edmonton, Alberta. Barry has been a real estate legal professional in Alberta for over 35 years and understands the intricacies and details of the foreclosure process in Alberta better than anyone I know.

He was kind enough to answer some of the top questions I get from subscribers on a frequent basis at CanadaHomeBuyer.ca. Go ahead and click on the video to hear his wisdom!

Your Personal Liability In An Alberta Foreclosure

By Harold

Understanding Your Personal Liability In An Alberta Foreclosure

Your personal liability in an Alberta foreclosure refers to any money you may owe the lender if the property being foreclosed on is worth less than what it ends up being sold for. With the price of homes and the down market, this can be serious business and you need to understand the potential consequences you’re facing.

When it comes to your personal liability in an Alberta foreclosure, you need to start by determining what type of mortgage you have in place as this can help you understand how much of any shortfall you may be responsible for.

Once you know this, you’ll have a clearer idea of how much you could be on the hook for with any outstanding debt you may owe your mortgage lender and even how you can move forward. So let’s start by breaking down the two most common types of mortgages in Alberta.

If you were fortunate enough to obtain a Conventional Mortgage (defined as a mortgage based on a downpayment equal to or more than 20% of the purchase price), and you live in Alberta, the lenders only remedy in the case of a defaulting borrower is to foreclose and sell the house. If there is not enough to pay the mortgage, (known as the “deficiency”), then the lender is out of luck.

On the other hand, if you have a High-Ratio Mortgage (defined as a mortgage based on a downpayment amount of less of than 20% of the purchase price), that mortgage is most likely insured by one of three Canadian mortgage insurers; Canada Mortgage and Housing Corporation (CMHC), Genworth Canada or Canada Guaranty. When a mortgage goes into default, and the debts can’t be repaid from sale proceeds, then your personal liability in an Alberta foreclosure can be much higher!
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The Personal Costs of Foreclosure in Alberta

By Alberta Foreclosure Info

The Real Costs of Foreclosure

For a homeowner in Alberta, the personal costs of foreclosure can be extremely important to understand. These costs include not just the obvious financial costs, but the substantial implications it can have on ones financial stability and personal credit rating, but more importantly, the devastating impacts on ones overall psychological health and well being. The key to surviving the ordeal is educating and empowering yourself about the process to help you make positive decisions.

When a homeowner finds themselves behind on their mortgage payments and facing the daunting prospects of trying to catch-up on their overdue mortgage payments and avoid foreclosure, it can be emotionally and physically challenging ordeal. Stress occurs within the family, with loved ones, relationships, work-life balance and ones happiness. The family unit could tend to feel the effects more prominently, causing what seems like an energy draining black cloud to settle overhead. Worst of all, this type of cost is mostly unseen by outsiders. Even close family could remain ‘in the dark’ as homeowners remain silent of the financial chasm that opens beneath them.
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