What is a foreclosure?

What is a foreclosure?

A Foreclosure is a legal action that a lender takes if a person stops paying back the mortgage. Foreclosure allows the lender to take possession of and sell the property, by first getting a court’s permission to do so, in an attempt to satisfy the amount still owing on the mortgage.

Lenders don’t want to foreclose if they don’t have to because it is expensive and takes a lot of time. A lender will probably not start to foreclose until two or three months after you stop paying. Normally, a lender will first send letters demanding payment. Then, if you don’t reply, the lender will usually start to foreclose.


If your property is being foreclosed on, there are a few things you can do:

1. First Get legal advice right away
2. Borrow the funds short-term through family or friends so that you can put the mortgage in good standing so that it allows you time to decide on your next steps.
3. Try to negotiate with your bank a repayment structure
4. Try to refinance your mortgage with the current lender or a different bank
5. Try to get a second mortgage or line of credit
6. Sell your home before the bank does

Be an informed client.

For more information contact your Toronto Mortgage Broker at 
416-920-9931 or visit www.eddiemac.ca for more information.