Losing a home is one of the worst things that could happen to a person and there are times when residential properties are put up for foreclosure. The foreclosure and related events may have bad impacts on your mental and physical health.
When someone who lent you money to purchase a property takes the legal possession or ownership of the property from you owing to failure in paying the dues is a foreclosure. So, if you are unable to pay the monthly mortgage on your home to the bank, then they have the right to begin the foreclosure process.
In Alberta, there are more than half a million homes on the mortgage, but in the year 2020, approximately three thousand homes were put for foreclosure. This brings the foreclosure rate in the statehouse to 0.5 percent, which is somewhat acceptable, given the economy was unstable in the pandemic. Although, Canada has never observed a national foreclosure average of more than 1.5 percent.
However, if you ever find yourself in such a situation, then you must know that there are some options you can consider to stop foreclosure Alberta.
1. Negotiate with the lender
If you are facing such an issue, you can try renegotiating the terms of your new payment plan with the lender. Many lenders are even keen to restructure and negotiate rather than foreclosure the property. It is a win-win situation since the lender gets to earn interest on your mortgage payments, so it is in their favor as well.
Commonly, there are two types of plans that lenders offer such as repayment and modification to those who are falling behind on their payments.
2. Reinstate the loan
Reinstating means that you bring the loan back to the status as it was before the foreclosure process. This is also called redeeming the loan and to reinstate the loan, one has to pay all the defaulted payments in full along with the additional overdue fees owing to the default.
3. Forbearance plan
It is a time period where the lender will suspend your payments for a short period that might last for six months; herein, you do not have to pay any mortgages. However, after the forbearance period, the borrower is expected to pay back everything he owes, including any late fees.
It is a viable option for those who have faced an unexpected loss and have the potential to manage their finances within a short span of time.
4. Selling the property
The last resort to stop a foreclosure is to sell your property. If you are unable to make timely payments and the lender is not budging in any way or making modifications in your payment plan, then selling the property is the only option. When you decide to sell, you would still lose the property, but you would not be a defaulter, and it would not harm your credit score. On the other hand, if your house is set for foreclosure, then your credit score will plummet.
These are some of the best options that you must know to stop foreclosure in Alberta. However, many people think that filing for bankruptcy is not the remedy for foreclosure as secured debts are protected from bankruptcy.