Today I have received a phone call from M. , he owns a house in the Fraser valley area. The house value is $200,000 at best and he owes about $270,000. The mortgage has not been paid for 6 months and the foreclosure proceedings have been going on for a while. The bank already received a permission to list the property and he got a phone call from the bank’s realtor today. (By the way, when the amount owing to the bank is higher than property value the redemption period is typically only one month)
M. wanted to know what to expect next. He was basically trying to see how long he can still stay in the house and he was looking for ideas how to make the process longer. Well, I am not a lawyer and am not a specialist in giving bad advice to homeowners. I actually recommended he cooperates with the realtor. What is most likely to happen if an owner does not cooperate with the Realtor is that the bank’s lawyer will go to court and get an order to show the house with the help of a bailiff. All costs will be charged back to the owner and he will end up in the same place but owing yet another few thousands in legal fees.
Note: If the sale proceeds don’t cover all that is owed, the lender still has a judgment against the owner for the remaining amount. They can try to collect this from for up to 10 years; after that, they can renew the judgment. It is always at the owner’s best interest to minimize the amount owing.
One more thing I have learned from M. Is that the realtor intends to estimate the house value and the asking price by himself after seeing the place. I reminded M. the he has the right to appeal to court if the proposed selling price is too low.