The Bank Is Threatening Foreclosure on My Home

When a bank or other institution lends you money to buy a home, they take a mortgage to secure payment. A mortgage is registered against the title of your home, and if you don’t make the required payments, the bank may be able to foreclose. This will usually mean you have to pay them the entire amount owing on the mortgage, though sometimes you can arrange to catch up your payments. If you cannot make some kind of arrangement, you risk your house being sold to pay the mortgage. The usual first step in a foreclosure is a demand letter from the lender or its lawyer, saying that you are “in arrears” (behind) in your payments and demanding that you bring them up to date.

First steps

1. Do not ignore the demand letter. If at all possible, you should get legal advice right away. Then, try to negotiate with the lender to see if you can arrange manageable repayment terms.
2. If you can’t work things out with the lender, the lender will probably serve you with a BC Supreme Court petition asking for an order nisi of foreclosure. If granted, an order nisi will state the amount owing on the mortgage and will establish a time period - usually 6 months, but sometimes shorter - during which you can redeem, or pay off the mortgage. At some point in the foreclosure process, the lender may also ask for an order that your home be sold, and for an order that the lender will have conduct (control) of the sale.
3. If you are served with a foreclosure petition, it is important to get legal help. If you are self-representing, you must file a response document within 21 days of service, and deliver it to all parties along with any affidavits (sworn written statements) telling your side of the story.

Supreme Court forms are also available online at the Courts of BC website. Click on Supreme Court, then Practice and Procedures, then Act, Rules and Forms. For information on what should go into an affidavit, see the publication “Can’t Pay Your Mortgage? What You Can Do If You’re Facing Foreclosure”.

What happens next

The court will set a date for a hearing of the petition. The judge will read the affidavits and other materials and listen to the lender’s lawyer and to you. Generally, if you are in default, the best you can hope for is enough time to arrange for other financing to pay out the lender or at least to come up with enough to catch up your payments. You can also use that time to try to sell the house, up to the time the lender gets an order for them to have conduct of sale.

Where to get help

See the Resource List for a list of helpful resources. Your best bets are:

• Credit Counselling Society of BC.
• PovNet.
• Access Pro Bono, Lawyer Referral Service, Salvation Army Pro Bono Lawyer Consultation Program, Private Bar Lawyers.
• The Legal Services Society publication “Can’t Pay Your Mortgage? What You Can Do If You’re Facing Foreclosure”.
• The Clicklaw common question "I’ve missed a few mortgage payments and am facing foreclosure" for a few more resources on foreclosure.

Before meeting with a lawyer or advocate, complete the form Preparing for Your Interview included in this Guide. Make sure you bring copies of all documents relating to your case.

The conditional transfer of the title to real property by an owner to another person in return for money given by that person as a loan, while retaining possession of the property. The party to whom title is given, the "mortgagee," usually a bank, is allowed to register the title of the property in their name if the person taking the loan, the "mortgagor," fails to make the required payments. See "encumbrance" and "real property."

In law, a document demonstrating ownership of a thing. See "ownership."

A letter describing a legal claim sent to the person against whom the claim might be made, offering to settle the claim without the necessity of legal action on terms set out in the letter. Demand letters are usually issued before court proceedings are commenced to try to settle a potential claim without the need for litigation.

A person licensed to practice law in a particular jurisdiction by that jurisdiction's law society. See "barrister and solicitor."

Child support or spousal support that is owing because of an order or agreement but is unpaid.

A mandatory direction of the court that is binding and enforceable upon the parties to a court proceeding. An "interim order" is a temporary order made following the hearing of an interim application. A "final order" is a permanent order, made following the trial of the court proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to appeal. Failing to abide by the terms of an order may constitute contempt of court. See "appeal," "consent order," "contempt of court," "decision" and "declaration."

An agreement to transfer the ownership of property from one person to another in exchange for the reciprocal transfer of something else, usually money. See "agreement."

In law, to formally deliver documents to a person in a manner that complies with the rules of court. Service may be ordinary (mailed or delivered to a litigant's address for service), personal (hand-delivered to a person), or substituted (performed in a way other than the rules normally require). See "address for delivery," "ordinary service," "personal service" and "substituted service."

Normally referred to as the "Supreme Court of British Columbia," this court hears most of the trials in this province. The Supreme Court is a court of inherent jurisdiction and has no limits on the sorts of claims it can hear or on the sorts of orders it can make. Decisions of the Provincial Court are appealed to the Supreme Court; decisions of the Supreme Court are appealed to the Court of Appeal. See "Court of Appeal," "jurisdiction," "Provincial Court" and "Supreme Court of Canada."

A legal document in which a person provides evidence of certain facts and events in writing. The person making the affidavit, the deponent, must confirm that the statements made in the affidavit are true by oath or affirmation. Affidavits must be signed in front of a lawyer, a notary public or a commissioner for taking oaths, who takes the oath or affirmation of the deponent. Affidavits are used as evidence, just as if the person making the affidavit had made the statements as a witness at trial. See "deponent", "affirm," "oath" and "witness."

In law, any proceeding before a judicial official to determine questions of law and questions of fact, including the hearing of an application and the hearing of a trial. See "decision."

A person appointed by the federal or provincial government to manage and decide court proceedings in an impartial manner, independent of influence by the parties, the government, or agents of the government. The decisions of a judge are binding upon the parties to the proceeding, subject to appeal.

In law, failing to do something which is either optional or mandatory, such as failing to respond to an application or to a claim within the time limits set out in the rules of court. See "default judgment."

(1) A lawyer or a person other than a lawyer who helps clients with legal issues, or (2) to argue a position on behalf of someone.

(1) In law, a court proceeding; a lawsuit; an action; a cause of action; a claim. (2) A historic decision of the court; case law. See "action," "case law, " "court proceeding," and "precedent."