Kamloops foreclosures and court ordered sales are common in the real estate market. Some years there are more than others, all depending on the economy and other factors.
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Kamloops and area home listings including judicial sales and foreclosed properties click here.
The foreclosure process is a mystery to many people. There are many misconceptions about purchasing a foreclosure property. It is more complicated than making an offer on a home that is not in foreclosure. I want to shed some light on the process and what buyers can expect. Also, if you have found yourself in a situation where you are nearing foreclosure, this will help you figure out what to do to avoid a judicial sale or foreclosure.
Judicial process begins with a demand letter sent to the borrower which gives the borrower a short amount of time to pay off the mortgage. Once the demand letter is sent to the borrower a petition is filed in the BC Supreme court which starts an action called the Order Nisi that gives a redemption time to the borrower. The redemption period, which is usually six months, is given to the borrower to redeem the mortgage. This can be done by the borrower attempting to sell the property.
After the Order Nisi, one of two things will happen. The petitioner will chose to have the property listed for sale by the court by way of a Judicial Sale through a Realtor. At this time, the lender will receive an order approving sale where the borrower will be responsible for any shortfalls between the borrowed amount of the mortgage and the sale amount.
The second option for the courts is an order of absolute foreclosure. If the redemption period has expired and if:
1. The property is worth the same amount as the mortgage debt or more,
2. The respondent borrower is judgment-proof (i.e. no assets or money to apply towards deficiency) or
3. There are no offers under a judicial sale; the lender can seek an absolute order of foreclosure, under which the lender becomes the new registered owner and all borrowers are wiped off title. No further action can be taken against the borrower after the court has granted the order absolute.
Once a judgment is placed against a property it is placed on the market with a Realtor. At this point a buyer can make an offer on this property. The purchase process for a foreclosed property is not like a property that is normally listed that is not under foreclosure. What happens is:
1. The buyer makes an offer to purchase the property and there is a subject period where the purchaser removes subjects such as home inspection, title search etc.
2. The subject free offer goes to court. Once in court the vendor’s lawyer presents the offer to the judge. (known as the Master in Foreclosure proceedings)
3. The Master asks if there are any other parties in the courtroom who want to submit an offer. If not, and the offer is market value, the Master will approve the sale. If there are competing offers the Master will instruct all parties including the original purchaser to leave the courtroom and resubmit their final subject free offer in a sealed, envelope to the vendor’s lawyer.
4. After all offers have been submitted the Master reviews the offers and approves the best offer.
All offers made at the court level must be subject free offers. As you can see, buying a foreclosed property is not as simple as many think. Even if you have an accepted offer on a foreclosed property, there is a high likelihood that there will be other offers once you reach the court proceedings.
I have not seen many foreclosures or court ordered sales come on to the Kamloops market recently. I do believe however, that we will see an increase in foreclosures and court ordered sales in 2009 and into 2010. Many home owners are over extended with debt not only in their homes but also personal credit card debt, personal loans and loans on vehicles.
Kamloops and area home listings including judicial sales and foreclosed properties click here.
I found this article below that details foreclosures in B.C. We really have seen very little foreclosure action in the Kamloops housing market. It has been announced recently that B.C. is not immune to this recession and job losses, the drop in property values and the amount of debt carried by individuals is increasing. This extra pressure on individuals and families will definitely cause those who are highly leveraged to sell either on their own to prevent a foreclosure (where the lender will force the sale) or the lender will foreclose on the property. It is expected that we will see more foreclosures in Kamloops in the months to come, but nothing like we have seen in the U.S. due to many factors that are different with our lending system here in Canada. Read more below…
Media reports from the United States routinely list a litany of horrors about the number of foreclosures. According to an August 4 New York Times report, 8.41 percent of subprime-mortgage loans from 2005 were in arrears by 90 days or more or in foreclosure in the month of June. Of subprime-mortgage loans from 2007, 16.6 percent were delinquent, according to the report.
This is creating huge problems for U.S. real-estate lenders, who have to put properties in foreclosure and then find a buyer in a market that is already glutted with distress sales.
Fortunately, in B.C. there haven’t been nearly as many foreclosures, which are legal processes in court to extinguish all rights, title, and interest in an owner’s property so that it can be sold to pay a lien against it.
According to the Canadian Bankers Association, just 0.15 percent of B.C. residential mortgages were in arrears in April, the latest month for which figures are available. This is quite low when compared with other months dating back to 1990. The percentage of mortgages in arrears peaked in May 1999 at 0.66 percent—more than four times the most recent figure.
Vancouver real-estate educator and foreclosure researcher Kap Hiroti told the Georgia Straight in a phone interview that he expects the number of B.C. foreclosures to increase—but only because the numbers are so low. He noted that some high-risk borrowers who’ve previously relied on alternative-financing companies are finding themselves in trouble because those lenders have abandoned the market.
“What that means is that you’ve got people who’ve got a mortgage one or two years ago,” Hiroti said. “They’re coming up for renewal, and that company cannot renew because they pulled out of the market. Usually, they’re very highly leveraged loans.”
Those cases, however, are the exception to the current market norm here. Hiroti pointed out another difference between the U.S. and Canada when it comes to foreclosures: south of the border, information is readily available. In Canada, it’s much more difficult to find data on properties that are about to enter foreclosure proceedings.
ForeclosureList.ca, a Web site owned by Hiroti, does the legwork in digging up information on foreclosures. He explained that a foreclosure typically begins when a lender issues a demand letter to a property owner seeking repayment of a debt. If the borrower doesn’t respond appropriately, the next step is for the lender to file a legal document called a petition in B.C. Supreme Court.
The petition lays out the particulars, and normally asks for a court order quashing the owner’s rights, title, and interest in a property. At this point, the owner has a chance to file a response, which sets the legal wheels in motion. Prior to any judicial rulings, the owner still has control over the property and can usually sell it without obtaining permission from the lender.
Hiroti said his company compiles information from these petitions and distributes it for $99 per month to subscribers, most of whom are real-estate investors. He estimated that there are approximately 20 foreclosure petitions filed in B.C. Supreme Court each week. Doing this research isn’t cheap. In B.C., it costs $8 to research a court file and $1 per page to photocopy documents.
Ordinarily, a judge or a master of the B.C. Supreme Court will issue a decree nisi, which may require owners to pay down the debt within six months. Hiroti said the next step is for a judge or a master to issue an order for the conduct of sale. “That’s where they actually bring a realtor onboard,” he commented.
The agent has to list the property for market value on the Multiple Listing Service. Once an offer is made, the court must approve the sale. It can be a time-consuming process, which is why Hiroti thinks it’s useful for investors to find out about foreclosures much earlier in the process.
So can a buyer get a better deal by approaching a property owner who has just received a petition? “It’s a good question,” Hiroti responded. “There is the potential.”
Kamloops foreclosures and court ordered sales are common in the real estate market. Some years there are more than others, all depending on the economy and other factors.
I found this article below that details foreclosures in B.C. We really have seen very little foreclosure action in the Kamloops housing market. It has been announced recently that B.C. is not immune to this recession and job losses, the drop in property values and the amount of debt carried by individuals is increasing. This extra pressure on individuals and families will definitely cause those who are highly leveraged to sell either on their own to prevent a foreclosure (where the lender will force the sale) or the lender will foreclose on the property. It is expected that we will see more foreclosures in Kamloops in the months to come, but nothing like we have seen in the U.S. due to many factors that are different with our lending system here in Canada. Read more below…