When a lender advances money to a borrower, they will often require some form of collateral to secure the loan.   A common example of this is a mortgage.  A mortgage lender (the mortgagee) will lend to the borrower (the mortgagor) on the condition that the lender is able to secure the loan by a mortgage on the mortgagor’s home.  Should the borrower default on the loan, the mortgagee is able to initiate foreclosure proceedings to recover the money they loaned to the mortgagor.

Upon default by the mortgagor, the mortgagee will send a demand to the mortgagor.  If the mortgagor is unable to meet the requirements of the demand, the mortgagee will be in a position to commence foreclosure proceedings.

The first Court appearance in a foreclosure in British Columbia is the Order Nisi.  At this Court appearance the mortgagee will seek judgment against the mortgagor for the balance owed under the mortgage – often called the Redemption Amount.  Additionally, a Redemption Period will be determined.  The usual Redemption Period is set at six months unless the mortgagor has no equity in the home.

If the mortgagor does not pay the entire Redemption Amount before the end of the Redemption Period then the mortgagee can return to Court to seek either an Order Absolute or an Order for Conduct of Sale.  An Order Absolute basically involves the mortgagor’s house being transferred to the mortgagee as the new owner.  Alternatively, the mortgagee can apply for an Order for Conduct of Sale at the end of the Redemption Period. An Order for Conduct of Sale allows the mortgagee to list and market the mortgagor’s house and receive the funds from the sale to pay off the loan.

Extensions to a Redemption Period are possible if certain conditions are met. In addition, in certain circumstances, a mortgagor can apply to Court for reinstatement of the mortgage loan.

Heath Law LLP offers legal services to both mortgagees and mortgagors and can provide service throughout the entire foreclosure process including drafting documents, conducting negotiations, and attending court.

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