The repossession process in other countries

Brendan Burgess

Brendan Burgess

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The Expert Group on Repossessions has summarised the repossession process in other jurisdictions which is very interesting.

[FONT=&quot]C[/FONT][FONT=&quot]h[/FONT][FONT=&quot]a[/FONT][FONT=&quot]p[/FONT][FONT=&quot]t[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]5 – Repossession procedures in other Jurisdictions[/FONT]


[FONT=&quot]I[/FONT][FONT=&quot]n[/FONT][FONT=&quot]t[/FONT][FONT=&quot]r[/FONT][FONT=&quot]o[/FONT][FONT=&quot]du[/FONT][FONT=&quot]c[/FONT][FONT=&quot]t[/FONT][FONT=&quot]i[/FONT][FONT=&quot]o[/FONT][FONT=&quot]n[/FONT]

[FONT=&quot]1[/FONT][FONT=&quot]. The Expert Group concentrated its attention on the procedures which apply in Northern Ireland given its proximity and the fact that many lending institutions operate in both jurisdictions. It noted the repossession procedures in England and Wales, New Zealand, Australia and Canada but did not have sufficient data on their operation to draw any conclusions (Appendix L).[/FONT]

[FONT=&quot]Repossession in Northern Ireland[/FONT]

[FONT=&quot]Pre-Action Protocol[/FONT]

[FONT=&quot]3[/FONT][FONT=&quot]. In common with England and Wales, a pre-action protocol operates in Northern Ireland. It describes the conduct a court will normally expect of the parties prior to the start of a possession claim. Specifically, the aims of the Protocol are to:[/FONT]


[FONT=&quot](a) ensure that a lender and a borrower act fairly and reasonably towards each other in resolving any matter concerning mortgage arrears; and[/FONT]

[FONT=&quot](b) encourage more pre-action contact between the lender and the borrower in an effort to seek agreement between the parties, and where this cannot be reached, to enable efficient use of the court's time and resources.[/FONT]

[FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot]P[/FONT][FONT=&quot]r[/FONT][FONT=&quot]o[/FONT][FONT=&quot]t[/FONT][FONT=&quot]o[/FONT][FONT=&quot]c[/FONT][FONT=&quot]o[/FONT][FONT=&quot]l[/FONT][FONT=&quot]goes on to outline a number of areas where specific matters must be addressed before the possession claim can be decided. These include requirements regarding communication between the lender and borrower and the efforts made by the parties to resolve the matter. Parties are required to explain the actions they have taken to comply with the Protocol.[/FONT]


[FONT=&quot]C[/FONT][FONT=&quot]ou[/FONT][FONT=&quot]r[/FONT][FONT=&quot]t[/FONT][FONT=&quot]P[/FONT][FONT=&quot]r[/FONT][FONT=&quot]o[/FONT][FONT=&quot]c[/FONT][FONT=&quot]e[/FONT][FONT=&quot]d[/FONT][FONT=&quot]u[/FONT][FONT=&quot]r[/FONT][FONT=&quot]e[/FONT][FONT=&quot]s[/FONT]

[FONT=&quot]4[/FONT][FONT=&quot]. The hearing of an action for repossession comes before the courts in Northern Ireland is normally in private before a High Court Master. At the hearing a borrower is expected to bring the following documentation:[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot](a) all letters from the lender;[/FONT]



[FONT=&quot](b) any notes of telephone calls or meetings with the lender; (c) a completed budget form;[/FONT]
[FONT=&quot](d) proof of salary or benefits;[/FONT]



[FONT=&quot](e) a letter from the estate agent if the house is being sold;[/FONT]



[FONT=&quot](f) a letter from the new lender if the borrower has applied for a remortgage;[/FONT]


[FONT=&quot](g) proof of a change of circumstances such as a job offer; (h) proof of money owing to the borrower;[/FONT]
[FONT=&quot](i) if [/FONT][FONT=&quot]arrears have arisen because of illness a letter from a GP, consultant or medical social worker explaining the condition or conditions (if available);[/FONT]

[FONT=&quot]5[/FONT][FONT=&quot]. The Master of the High Court has the following powers in relations to an action for repossession. He or she may:[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] Adjourn the case for a time to allow borrowers to make payments or engage with the lender.[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] Make an order for possession but suspend it so that it will not take effect without another application to the Court and for as long as agreed payments are being met.[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] Make an order for possession but stay the order for a period of time.[/FONT]

[FONT=&quot]
[/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] On application from a party, vary the terms of a suspension of an order due to changed circumstances[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] On application from a party, stay enforcement of a Possession Order due to changed circumstances[/FONT]

[FONT=&quot]Number of Repossessions in Northern Ireland[/FONT]

[FONT=&quot]6[/FONT][FONT=&quot]. Since the onset of the recession in 2007, the number of court orders for the repossession of properties in Northern Ireland has tripled (711 in 2007 increasing to 2,216 in 2012). The number of new repossession cases lodged with the Enforcement of Judgements Office (EJO) continues to increase significantly (643 in 2007 increasing to 1,826 in 2012). All indications suggest that this trend will continue for the foreseeable future.[/FONT]


[FONT=&quot]Stat[/FONT][FONT=&quot]u[/FONT][FONT=&quot]t[/FONT][FONT=&quot]o[/FONT][FONT=&quot]ry Authority[/FONT]

[FONT=&quot]7[/FONT][FONT=&quot]. The Enforcement of Judgments Office (EJO) is part of the Northern Ireland Courts & Tribunal Service (NICTS). The EJO provide a centralised service for the enforcement of civil court judgments relating to money, goods and property.[/FONT]


[FONT=&quot]8[/FONT][FONT=&quot]. The EJO operates under the Judgments Enforcement (NI) Order 1981(the 1981[/FONT]

[FONT=&quot]O[/FONT][FONT=&quot]rd[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]) and is supported by the Judgments Enforcement Rules (NI) 1981 (the[/FONT]

[FONT=&quot]19[/FONT][FONT=&quot]8[/FONT][FONT=&quot]1 Rules).[/FONT]



[FONT=&quot]9[/FONT][FONT=&quot]. The EJO is currently examining the repossession process and also reviewing the need to physically remove the goods of borrowers from properties and store them in ‘a place of safety’.[/FONT]


[FONT=&quot]L[/FONT][FONT=&quot]e[/FONT][FONT=&quot]nd[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]s[/FONT][FONT=&quot]’[/FONT][FONT=&quot]E[/FONT][FONT=&quot]x[/FONT][FONT=&quot]p[/FONT][FONT=&quot]e[/FONT][FONT=&quot]c[/FONT][FONT=&quot]t[/FONT][FONT=&quot]a[/FONT][FONT=&quot]t[/FONT][FONT=&quot]i[/FONT][FONT=&quot]o[/FONT][FONT=&quot]n[/FONT][FONT=&quot]s[/FONT]

[FONT=&quot]10[/FONT][FONT=&quot]. Many cases are listed for repossession on a specific date but discussions between the lender and borrower often leads to an agreement and repossession is then postponed indefinitely. It appears that during recent discussions between the EJO and the Council of Mortgage Lenders (CML), the latter has expressed concerns that there is a significant disparity in repossession practices between[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot]Northern Ireland and other parts of the UK. In Northern Ireland at present a lender may wait between 6 and 9 months after the case has been accepted for enforcement to obtain possession of the property.[/FONT]


[FONT=&quot]E[/FONT][FONT=&quot]x[/FONT][FONT=&quot]e[/FONT][FONT=&quot]c[/FONT][FONT=&quot]u[/FONT][FONT=&quot]t[/FONT][FONT=&quot]i[/FONT][FONT=&quot]o[/FONT][FONT=&quot]n[/FONT][FONT=&quot]o[/FONT][FONT=&quot]f Possession Orders by EJO[/FONT]

[FONT=&quot]11[/FONT][FONT=&quot]. If the borrowers(s) do not adhere to the order of the court, the lender may make application to the EJO to enforce the order of the court.[/FONT]


[FONT=&quot]12[/FONT][FONT=&quot]. The application is made up of 2 stages:[/FONT]



[FONT=&quot]Sta[/FONT][FONT=&quot]g[/FONT][FONT=&quot]e 1 is to give notice to the borrower that the lender will enforce their court order if the borrower continues to ignore it. The EJO serve a copy of the notice on the borrower(s) and confirm service to the lender.[/FONT]


[FONT=&quot]Sta[/FONT][FONT=&quot]g[/FONT][FONT=&quot]e 2 – if the borrower continues to ignore the court order, the lender may make application to enforce their court order.[/FONT]


[FONT=&quot]15[/FONT][FONT=&quot]. Once the application is accepted, enforcement of the court order can be broken down into 3 stages.[/FONT]
[FONT=&quot]A. The Pre-Repossession Stage[/FONT]

[FONT=&quot]•[/FONT][FONT=&quot] EJO issue a Notice of Intent to make an order for delivery of possession of the property.[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] If an objection is made, the matter is listed before the EJO Master for adjudication. The Master will decide whether the objection is upheld or overruled.[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] If no objections are made or an objection is overruled, the EJO will issue an order for delivery of possession of the property.[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] A repossession date is set by the EJO and this is communicated to the lender.[/FONT]

[FONT=&quot]
[/FONT]
[FONT=&quot]B[/FONT][FONT=&quot]. The Repossession Stage[/FONT]

[FONT=&quot]•[/FONT][FONT=&quot] An Enforcement Officer (EO) (who will manage the repossession) serves the order personally on each borrower (and other persons of residence in the property).[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] The EO will explain to each person served the process of repossession and what consequences may arise if they continue disobey the court order and fail to move out voluntarily.[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] Nearer the repossession date, final visits are made by the EO.[/FONT]

[FONT=&quot]A[/FONT][FONT=&quot]rr[/FONT][FONT=&quot]a[/FONT][FONT=&quot]n[/FONT][FONT=&quot]g[/FONT][FONT=&quot]e[/FONT][FONT=&quot]m[/FONT][FONT=&quot]e[/FONT][FONT=&quot]n[/FONT][FONT=&quot]t[/FONT][FONT=&quot]s are made with the contractor contacted by the EJO (to make provisions to assist the EJO in removing the borrower’s goods from the property to a place of safety).[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] On the repossession day, an EO will instruct the contractor to remove any goods from the property. Once cleared, the lender (or his agent) signs to confirm that the property has been repossessed and handed over to them.[/FONT]


[FONT=&quot]C. [/FONT][FONT=&quot] Post Repossession Stage[/FONT]

[FONT=&quot]•[/FONT][FONT=&quot] The goods taken are stored in a place of safety, i.e. a storage site which is managed under an EJO contract with an out-sourced and service.[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] The borrower is contacted by the EJO and made aware of the costs of repossession and that they should be paid. If they are not paid, their goods will be sold to off-set against any expenses incurred by the EJO on the day the repossession took place.[/FONT]


[FONT=&quot]•[/FONT][FONT=&quot] If the costs are not paid within 1 calendar month, the EJO will instruct the contractor to have the goods valued and auction the goods to off-set any expenses incurred.[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot]16[/FONT][FONT=&quot]. Any monies recouped are allocated to the case to off-set the costs incurred by the EJO on the day of the repossession and thereafter.[/FONT]


[FONT=&quot]E[/FONT][FONT=&quot]x[/FONT][FONT=&quot]p[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]t[/FONT][FONT=&quot]Group conclusions[/FONT]

[FONT=&quot]17[/FONT][FONT=&quot]. The Expert Group notes that the procedures applicable in Northern Ireland are broadly similar to those that apply in this jurisdiction, in particular that an order for possession must be obtained from the relevant court and execution of the order for possession may follow.[/FONT]


[FONT=&quot]18[/FONT][FONT=&quot]. There are some notable differences, however, particularly in relation to the documentation which a borrower must bring to a hearing before a Master of the High Court. The Group believes that efficiencies could to be achieved from the introduction of standard documentation requirements in repossession actions in this jurisdiction. In addition, the Group believes that further efficiencies could be made by providing that borrowers should, where entering a defence, be required to furnish certain particulars at the first hearing before the judge.[/FONT]
 
[FONT=&quot]R[/FONT][FONT=&quot]EPOSSESSION PROCEDURES IN OTHER [/FONT][FONT=&quot]J[/FONT][FONT=&quot]U[/FONT][FONT=&quot]R[/FONT][FONT=&quot]I[/FONT][FONT=&quot]S[/FONT][FONT=&quot]D[/FONT][FONT=&quot]I[/FONT][FONT=&quot]C[/FONT][FONT=&quot]T[/FONT][FONT=&quot]I[/FONT][FONT=&quot]O[/FONT][FONT=&quot]N[/FONT][FONT=&quot]S[/FONT][FONT=&quot][/FONT]
[FONT=&quot]A. Repossession in the UK[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]1[/FONT][FONT=&quot]. Borrowers who fail to make mortgage payments or repayments on any loan secured on their property in time run the risk of falling into arrears. If the situation continues to escalate then they could be in danger of having their property repossessed.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]2[/FONT][FONT=&quot]. Under the terms of the mortgage contract, lenders have the power to take back control of the property and sell it on to recover any arrears and outstanding balances. However, a lender will normally only resort to such action if all other means of retrieving their money have failed. There are, however, several stages where borrowers have the opportunity to prevent this from happening.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]3[/FONT][FONT=&quot]. The following is a general overview of the stages involved with the repossession process:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Sta[/FONT][FONT=&quot]g[/FONT][FONT=&quot]e 1: Missed Payments[/FONT]
[FONT=&quot]A[/FONT][FONT=&quot]t[/FONT][FONT=&quot] [/FONT][FONT=&quot]the first stage, the lender will contact their customer in writing or by telephone to query and chase up missed payments.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]A[/FONT][FONT=&quot]t[/FONT][FONT=&quot] [/FONT][FONT=&quot]t[/FONT][FONT=&quot]h[/FONT][FONT=&quot]i[/FONT][FONT=&quot]s point, borrowers are advised to talk to their lender and inform them of their situation. Some lenders may agree to let their customers make additional monthly payments to pay off the arrears over a set period. Borrowers should also make notes about any conversations they have, including the date and time of the conversation, the name of the person they spoke to and the outcome of the discussion, and ask for details of any agreements reached to be sent in writing.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Sta[/FONT][FONT=&quot]g[/FONT][FONT=&quot]e 2: Solicitors Notice[/FONT]
[FONT=&quot]L[/FONT][FONT=&quot]e[/FONT][FONT=&quot]nd[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]s will usually wait until 3 months to see if any efforts have been made to pay the arrears before referring the case to their solicitors. The solicitors representing the lender will write to the borrower and demand full reimbursement of all missed payments.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot]y[/FONT][FONT=&quot] [/FONT][FONT=&quot]w[/FONT][FONT=&quot]ill [/FONT][FONT=&quot]a[/FONT][FONT=&quot]l[/FONT][FONT=&quot]s[/FONT][FONT=&quot]o[/FONT][FONT=&quot] [/FONT][FONT=&quot]i[/FONT][FONT=&quot]n[/FONT][FONT=&quot]f[/FONT][FONT=&quot]o[/FONT][FONT=&quot]r[/FONT][FONT=&quot]m[/FONT][FONT=&quot] [/FONT][FONT=&quot]them that failure to make these payments and improve their account could result in repossession of their property.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]B[/FONT][FONT=&quot]o[/FONT][FONT=&quot]rr[/FONT][FONT=&quot]o[/FONT][FONT=&quot]w[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]s in this situation should talk to the solicitors and follow the same process as with Stage 1 – i.e. reach an agreement on how to catch up with the missed payments over a period of time in addition to meeting the regular monthly payment. Notes should again be taken regarding any discussions that take place and details of any agreements reached should be requested to be sent in writing.[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot]Sta[/FONT][FONT=&quot]g[/FONT][FONT=&quot]e 3: Proceedings Begin[/FONT]
[FONT=&quot]If [/FONT][FONT=&quot]after 4-6 months a borrower is still in arrears, the lenders’ solicitors will begin proceedings for repossession by seeking a possession hearing at the County Court local to the borrower.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]O[/FONT][FONT=&quot]n filing a request for issue, the matter will ordinarily be listed for a hearing date 4-6 weeks from that point, although it usually depends on how busy the court's hearings schedule is.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]A[/FONT][FONT=&quot]t[/FONT][FONT=&quot] [/FONT][FONT=&quot]t[/FONT][FONT=&quot]h[/FONT][FONT=&quot]i[/FONT][FONT=&quot]s stage, borrowers must complete and promptly return the reply form received from the Court, stating their intentions and including as much detail as possible about their income and expenditure so that the court can determine whether they can meet the current monthly instalment and pay an amount towards the arrears. A letter and a copy of any supporting information that they may feel is relevant, such as attempted negotiations to reach an agreement with their lender, should also be attached. Borrowers should also make a copy of the Court summons for their records.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]If [/FONT][FONT=&quot]a borrower can afford to pay the current monthly instalment together with a contribution towards the arrears before the hearing date, then the lender may be willing to suspend proceedings.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]A[/FONT][FONT=&quot]l[/FONT][FONT=&quot]t[/FONT][FONT=&quot]h[/FONT][FONT=&quot]o[/FONT][FONT=&quot]u[/FONT][FONT=&quot]g[/FONT][FONT=&quot]h[/FONT][FONT=&quot] [/FONT][FONT=&quot]so[/FONT][FONT=&quot]m[/FONT][FONT=&quot]e lenders will inform their customers that there is no chance of this happening, the final decision rests with the District Judge. The judge will give the borrower an opportunity to make an offer to pay the full monthly amount, along with an additional monthly amount to clear the arrears. If the court is satisfied that payment can be maintained, the judge will grant a Suspended Possession Order, allowing the borrower to remain in their home.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Sta[/FONT][FONT=&quot]g[/FONT][FONT=&quot]e 4: Court Hearing[/FONT]
[FONT=&quot]A [/FONT][FONT=&quot]p[/FONT][FONT=&quot]o[/FONT][FONT=&quot]s[/FONT][FONT=&quot]s[/FONT][FONT=&quot]e[/FONT][FONT=&quot]ss[/FONT][FONT=&quot]i[/FONT][FONT=&quot]o[/FONT][FONT=&quot]n[/FONT][FONT=&quot] [/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot]a[/FONT][FONT=&quot]r[/FONT][FONT=&quot]i[/FONT][FONT=&quot]n[/FONT][FONT=&quot]g[/FONT][FONT=&quot] [/FONT][FONT=&quot]takes place in private chambers and often lasts no more than 10-20 minutes. The District Judge will help the borrower by asking them simple relevant questions, which the borrowers should use to explain their situation and clearly state how they intend to go about fixing the situation.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]If [/FONT][FONT=&quot]the borrower can demonstrate their ability to meet the current monthly mortgage payment and pay a contribution towards the arrears, such that the arrears will be paid over the remaining mortgage term, the court will in almost every instance make a Suspended Possession Order. This arrangement basically means that the borrower will be allowed to remain in the property so long as they maintain monthly payments and arrears contributions agreed by all parties. But if the repayments towards the mortgage arrears are not maintained then[/FONT]
[FONT=&quot]the lender has the right to seek possession by eviction (Possession Warrant)[/FONT]
[FONT=&quot]w[/FONT][FONT=&quot]i[/FONT][FONT=&quot]t[/FONT][FONT=&quot]h[/FONT][FONT=&quot]o[/FONT][FONT=&quot]u[/FONT][FONT=&quot]t[/FONT][FONT=&quot] [/FONT][FONT=&quot]a further hearing.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Sta[/FONT][FONT=&quot]g[/FONT][FONT=&quot]e 5: Eviction Notice[/FONT]
[FONT=&quot]If [/FONT][FONT=&quot]a Possession Order is granted and the borrower does not leave by the set date or the borrower defaults on a Suspended Order for Possession, the lender will apply to the court for a formal eviction without a hearing and a Possession[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot]W[/FONT][FONT=&quot]arrant will be obtained. Obtaining a Possession Warrant can take between 2-3 weeks, depending upon the court's backlog and the bailiff's work load. The borrower will receive a letter from the court showing the exact date and time by which they must vacate the property - generally 7-14 days from the date that[/FONT]
[FONT=&quot]the eviction notice is granted.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]A[/FONT][FONT=&quot]t[/FONT][FONT=&quot] [/FONT][FONT=&quot]the notified date and time, a court bailiff representing the lender and a locksmith will arrive to formally take back control and possession of the property. Residents are generally given around 10 minutes to collect their belongings and leave before the locks are changed. The borrower is allowed one further visit to collect any remaining belongings, which usually takes place around two weeks after they have been evicted.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]If [/FONT][FONT=&quot]the borrower fails to leave the house by the set date, the lender will issue the Possession Warrant and the resident(s) will be forcibly removed from the property.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Even [/FONT][FONT=&quot]at this stage borrowers can still make efforts to stop their home from being repossessed. This can be achieved by suspending the Possession Warrant, which can be done in the following ways:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]C[/FONT][FONT=&quot]l[/FONT][FONT=&quot]e[/FONT][FONT=&quot]a[/FONT][FONT=&quot]r[/FONT][FONT=&quot]i[/FONT][FONT=&quot]n[/FONT][FONT=&quot]g[/FONT][FONT=&quot] [/FONT][FONT=&quot]a[/FONT][FONT=&quot]rrears and making ongoing mortgage payments - If the arrears are cleared, the court will no longer see any reason to proceed with the possession action, and will allow the borrower to remain. Payment of the arrears can be achieved by paying an Option Fee. In order to ensure ongoing mortgage payments are maintained, direct payments can be set up through the bank/building society so long as they have given permission to do so.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]St[/FONT][FONT=&quot]raight Purchase (with or without rent back, and with or without an Option to buy back) – In order to do this, the borrower needs to show strong evidence to the court that the deal has been agreed and that it is from a proceedable buyer. The court should be presented with an application consisting of a letter confirming the offer to purchase the[/FONT]
[FONT=&quot]pr[/FONT][FONT=&quot]o[/FONT][FONT=&quot]p[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]ty, a letter from the seller’s solicitors confirming that they have orders to sell, and a letter from the purchaser's solicitors confirming the purchase. Prior to the application to the court, the vendor is also advised to make the most recent monthly payment and to make any further monthly payments that are due until the sale is completed.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]4[/FONT][FONT=&quot]. It is also vital for borrowers to attend the Court hearing with all documentation in hand. The more evidence a borrower has to show the judge that every effort has been made to meet obligations then the more chance they have in getting a better result in court.[/FONT]
 
[FONT=&quot]B[/FONT][FONT=&quot]. Repossession in New Zealand[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]I[/FONT][FONT=&quot]n[/FONT][FONT=&quot]t[/FONT][FONT=&quot]r[/FONT][FONT=&quot]o[/FONT][FONT=&quot]du[/FONT][FONT=&quot]c[/FONT][FONT=&quot]t[/FONT][FONT=&quot]i[/FONT][FONT=&quot]o[/FONT][FONT=&quot]n[/FONT][FONT=&quot][/FONT]
[FONT=&quot]1[/FONT][FONT=&quot]. Foreclosure is the process where a lender (mortgage holder) gains ownership of a property in New Zealand, is given the legal right to sell the property and uses the proceeds to pay off the mortgage. This usually happens when the borrower is in default on his/her mortgage payments. The lender can generally initiate foreclosure any time after a default on the mortgage. However, there are[/FONT]
[FONT=&quot]nu[/FONT][FONT=&quot]me[/FONT][FONT=&quot]r[/FONT][FONT=&quot]o[/FONT][FONT=&quot]u[/FONT][FONT=&quot]s state laws and regulations that govern foreclosure to protect both the home owner and the lender.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]T[/FONT][FONT=&quot]y[/FONT][FONT=&quot]p[/FONT][FONT=&quot]e[/FONT][FONT=&quot]s[/FONT][FONT=&quot] [/FONT][FONT=&quot]o[/FONT][FONT=&quot]f Foreclosure in New Zealand[/FONT]
[FONT=&quot]2[/FONT][FONT=&quot]. There are two main types of foreclosure. The first is foreclosure by judicial sale.[/FONT]
[FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]is is [/FONT][FONT=&quot]a[/FONT][FONT=&quot]v[/FONT][FONT=&quot]a[/FONT][FONT=&quot]il[/FONT][FONT=&quot]a[/FONT][FONT=&quot]b[/FONT][FONT=&quot]l[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]in [/FONT][FONT=&quot]e[/FONT][FONT=&quot]v[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]y state and is the required method in many. A foreclosure by judicial sale is the sale of the property under the supervision of a court in[/FONT]
[FONT=&quot]New Zealand, with the proceeds going first to satisfy the mortgage, and then to satisfy other lien holders, and finally to the borrower. Because it is a legal action, all the proper parties must be notified of the foreclosure, and there will be both pleadings and some sort of judicial decision, usually after a short trial.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]3[/FONT][FONT=&quot]. The second type of foreclosure in New Zealand, foreclosure by power of sale, involves the sale of the property by the lender, though not through a court. This type of foreclosure is generally faster than a foreclosure by judicial sale, but it is not available in every state.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]4[/FONT][FONT=&quot]. There are other types of foreclosures also available in certain states. For example, some states allow strict foreclosure which gives the property to the lender with no obligation to sell.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]P[/FONT][FONT=&quot]r[/FONT][FONT=&quot]o[/FONT][FONT=&quot]c[/FONT][FONT=&quot]e[/FONT][FONT=&quot]du[/FONT][FONT=&quot]r[/FONT][FONT=&quot]e[/FONT][FONT=&quot]s[/FONT][FONT=&quot][/FONT]
[FONT=&quot]5[/FONT][FONT=&quot]. Before taking action the lender must serve a borrower with a notice under section 119 of the Property Law Act 2007. This notice must adequately inform the borrower of:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]the nature and extent of the default complained of (that is, the amount by which the borrower is in default)[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]the date by which the borrower must remedy the default[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]the rights that the lender is entitled to exercise if the borrower does not remedy the default by the specified date[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]6[/FONT][FONT=&quot]. The date specified must be at least four weeks from the date on which the notice is given. But if the mortgage contract specifies a period for this that is longer than four weeks, the date specified in the notice cannot be earlier than the end of that longer period.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]7[/FONT][FONT=&quot]. If a borrower receives a notice from a lender that does not comply with the legal requirements, he/she may be able to apply to the court for an injunction to[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot]pr[/FONT][FONT=&quot]e[/FONT][FONT=&quot]v[/FONT][FONT=&quot]e[/FONT][FONT=&quot]n[/FONT][FONT=&quot]t the sale going ahead. Further, if the lender exercises the power of sale before the date specified in the notice, the borrower may also be able to apply to the court for a remedy.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]m[/FONT][FONT=&quot]o[/FONT][FONT=&quot]rtgagee's [/FONT][FONT=&quot]d[/FONT][FONT=&quot]u[/FONT][FONT=&quot]t[/FONT][FONT=&quot]y to obtain the best price[/FONT]
[FONT=&quot]8[/FONT][FONT=&quot]. The lender has a statutory duty to take reasonable care to obtain the best price reasonably obtainable as at the time of sale. If the lender breaches this duty, the borrower can apply to the court for a remedy.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]9[/FONT][FONT=&quot]. To satisfy the duty the lender must adequately market the property, which may involve advertising outside the local area, giving notice of the property's advantages (including the potential for any development), and setting a realistic reserve price based on the property's valuation.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]r[/FONT][FONT=&quot]e[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]w[/FONT][FONT=&quot]ay[/FONT][FONT=&quot]s of exercising the power of sale[/FONT]
[FONT=&quot]10[/FONT][FONT=&quot]. The lender can exercise the power of sale in one of three ways:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]s[/FONT][FONT=&quot]a[/FONT][FONT=&quot]l[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]through the High Court Registrar[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]s[/FONT][FONT=&quot]a[/FONT][FONT=&quot]l[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]through public auction[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]a private sale[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Sa[/FONT][FONT=&quot]l[/FONT][FONT=&quot]e through the Registrar[/FONT]
[FONT=&quot]11[/FONT][FONT=&quot]. If the lender chooses to exercise its power of sale through the High Court Registrar, it must apply to the Registrar and notify the Registrar of the name and address of the borrower and of any other served lender. The Registrar must be satisfied that the lender is entitled to exercise its power of sale. A lender is entitled to buy the mortgaged property only if the sale is conducted through the Registrar.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]B[/FONT][FONT=&quot]o[/FONT][FONT=&quot]rr[/FONT][FONT=&quot]o[/FONT][FONT=&quot]w[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]’[/FONT][FONT=&quot]s[/FONT][FONT=&quot] [/FONT][FONT=&quot]right to redeem the property[/FONT]
[FONT=&quot]12[/FONT][FONT=&quot]. There is a small degree of protection afforded to the borrower, through the "redemption price" this is the price at which he or she may redeem the land to be sold. At any time before the Registrar's sale the borrower may pay the redemption price or the amount due and owing under the mortgage; the lender must then release the mortgage.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]13[/FONT][FONT=&quot]. The redemption price is set by the lender, and must be specified in the lender’s application to the Registrar to conduct the sale. Any advertisement for the lender sale must state that the redemption price is available at the Registrar's office and can be obtained before the auction.[/FONT]
 
[FONT=&quot]C. [/FONT][FONT=&quot] Repossession in Australia[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]1[/FONT][FONT=&quot]. In Australia, there are legislative provisions that protect borrowers who enter into a loan contract.[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Hardship provisions are mandatory in loan contracts and it is always appropriate to review that contract when entering into a loan agreement.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] If a borrower feels they are approaching a difficult financial time and may not be able to make their loan repayments - they should approach their lender – there may be a simple solution in terms of 'rearranging' the loan to reduce the repayment.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] If not, the lender may enter into an agreement with the borrower for a repayment holiday (where the interest is capitalised) or part payments for a limited time.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] If no arrangement can be made, the owner will be given time to sell the property and pay out the debt. It is rare that the situation will move to mortgagee in possession - where the lender will sell the property - but it happens.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] To foreclose on a loan the lender will make application to the courts for repossession. They will have to prove their case to the court to get the order granted. This may involve detailing the amount of arrears, the timeframe the loan has been in arrears, what notifications have been sent to the borrowers about the arrears and what attempts they have made to assist the customer bringing the loan back in to order.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Usually, lenders will have sent out letters advising of loan arrears starting at 7 days and continuing at 14 days, 21 days and then monthly. Depending on the amount and history of the loan they will also attempt to contact the customer by phone at any time a loan is in arrears in order to make arrangements for payment.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Once the property is in the possession of the lender they will make arrangements for it to be sold in order to recover their funds. Again times and laws have changed. The days of a property being sold for an amount just to cover the loan is unlikely to happen. Lenders have to show they have not taken advantage of the situation.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Most lenders will put the sale of the property out to tender by real[/FONT]
[FONT=&quot]es[/FONT][FONT=&quot]tate agents in order to get a fair market price. They may even contract someone to fix things up on a property if it will improve the anticipated sale price. Of course, all of the costs in repossessing the property and selling it will come out of the sale price.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Should the property not sell for enough to cover the loan and all the costs, the borrower is still liable for the shortfall. The lender, or if the loan was insured, the lenders mortgage insurer may still then pursue the borrower in the courts to recover the shortfall.[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot]2[/FONT][FONT=&quot]. Main steps in repossession process[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Ste[/FONT][FONT=&quot]p 1 – Lender sends borrower a letter or otherwise contacts the lender when a repayment is missed.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]A[/FONT][FONT=&quot]t[/FONT][FONT=&quot] [/FONT][FONT=&quot]t[/FONT][FONT=&quot]h[/FONT][FONT=&quot]i[/FONT][FONT=&quot]s stage, the Borrower can contact the lender who must assess and respond to the request. Borrower should explain how the missed repayment came[/FONT]
[FONT=&quot]about, how he plans to catch up on repayments and seek advice on what the lender can do to help.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Ste[/FONT][FONT=&quot]p 2 – Lender sends borrower a default notice which will give the borrower at least 30 days to catch up on the missed repayments.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]A[/FONT][FONT=&quot]t[/FONT][FONT=&quot] [/FONT][FONT=&quot]t[/FONT][FONT=&quot]h[/FONT][FONT=&quot]i[/FONT][FONT=&quot]s stage the Borrower may:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] pay the arrears and usual repayment – lender cannot start legal action in this scenario.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Ask lender to reduce or delay repayments. If lender refuses borrower may appeal to lender’s internal complaints section. If still unhappy borrower can lodge a dispute with the Financial Ombudsman Service or Credit Ombudsman Service[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Consider selling house to repay the debt.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Ste[/FONT][FONT=&quot]p 3 – Lender serves borrower with a Statement of Claim or Summons for the debt or for the repossession of the house. Borrower is advised to seek legal advice.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Ste[/FONT][FONT=&quot]p 4 – Lender applies for a writ (an order) to take possession of the home.[/FONT]
[FONT=&quot]Bo[/FONT][FONT=&quot]rrower advised to seek legal advice.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Ste[/FONT][FONT=&quot]p 5 – Lender sends borrower a letter telling him when a Sheriff will come to change the locks. This is also known as a Notice to Vacate. Borrower advised to seek legal advice.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Ste[/FONT][FONT=&quot]p 6 – Lender sends a Sheriff to the borrower’s house to evict and change the locks. Borrower advised to seek legal advice.[/FONT]
 
[FONT=&quot]Repossession in Canada[/FONT]
[FONT=&quot]1[/FONT][FONT=&quot]. The Foreclosure Process in Canada varies from province to province. There are two main ways a lender can recover a mortgage debt when a borrower defaults.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]2[/FONT][FONT=&quot]. Judicial Sale. A judicial sale is conducted under the supervision and authority of the court system. A lender must apply to the court for the court’s permission to sell a property. The Judicial Sale method has been adopted as the primary debt recovery vehicle in British Columbia, Alberta, Manitoba, Saskatchewan and Quebec.[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot] [/FONT]
[FONT=&quot]3[/FONT][FONT=&quot]. The main features of the judicial sale process are:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] It is conducted under the supervision and authority of the Court;[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] The lender must apply to the court to get permission to sell property;[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] There is extensive Court involvement in every step of the process;[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] The process involves bringing an action against borrower and other liable parties.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]4[/FONT][FONT=&quot]. Power of Sale. A power of sale allows a lender to sell a property without the involvement of the court. The lender has the right to sell the property according to the terms set out in the mortgage document or according to provincial legislation that authorizes “power of sale” within that province. In Ontario the “Power of Sale” is used as the lenders primary method of recovery. The same method is used in Newfoundland, New Brunswick and Prince Edward Island. Lenders in Ontario may use the Judicial Sale method or the Power of Sale, however, almost 99% of all foreclosures are Power of Sale because it is less expensive than the judicial process and it is much faster – the lender gets their money quicker.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]5[/FONT][FONT=&quot]. Features of power of sale procedure:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] It allows lender to sell property without the involvement of the court.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] The Process is started by sending a notice to the borrower.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] The lender must seek action against borrower after property has been sold and the amount garnered is less than that owed.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]6[/FONT][FONT=&quot]. Difference between the Judicial Sale and a Power of Sale procedures[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]are three basic differences between the Judicial Sale and the Power of[/FONT]
[FONT=&quot]S[/FONT][FONT=&quot]a[/FONT][FONT=&quot]l[/FONT][FONT=&quot]e[/FONT][FONT=&quot]:[/FONT][FONT=&quot][/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] The extent of Court involvement is the first major difference. In Judicial[/FONT]
[FONT=&quot]Sale Provinces, [/FONT][FONT=&quot]the court is extensively involved in the entire process.[/FONT]
[FONT=&quot]e[/FONT][FONT=&quot].[/FONT][FONT=&quot]g. ordering the property to be sold, confirmation of the sale procedure and hearing any application for a deficiency judgment. In contrast to this, there is virtually NO court involvement in the “Power of Sale” Provinces.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] The Instigation of Proceedings. The way in which the Foreclosure process is started in the Power of Sale Provinces is simply by way of sending a notice to the borrower and current owner of the property. This “notice” starts the process. In contrast, the Judicial Sale Provinces start the process by way of a lawsuit against the borrower and all who may be liable.[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Where the sale of a property does not cover all the outstanding mortgage a “deficiency judgment” action is commenced. In Judicial Sale Provinces, the deficiency judgment action is started as part of the main action, or suing of the borrower via the initial law suit. In Power of Sale Provinces, a lender seeking a deficiency judgment must start an action against the borrower “after” the property has been sold. So even if the borrower loses his house, if there isn’t enough equity to cover all the costs, he will still be liable for the outstanding debts.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]7[/FONT][FONT=&quot]. Time frames.[/FONT]
[FONT=&quot]I[/FONT][FONT=&quot]n[/FONT][FONT=&quot] [/FONT][FONT=&quot]g[/FONT][FONT=&quot]e[/FONT][FONT=&quot]n[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot]a[/FONT][FONT=&quot]l[/FONT][FONT=&quot],[/FONT][FONT=&quot] [/FONT][FONT=&quot]the Judicial Sale process usually can take about six months or so before it is all over. To contrast this, a Power of Sale foreclosure (particularly in Ontario) can be over in only 45 days from the time the “notice” has been given.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]8[/FONT][FONT=&quot]. British Columbia Foreclosure Process[/FONT]
[FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e [/FONT][FONT=&quot]f[/FONT][FONT=&quot]o[/FONT][FONT=&quot]r[/FONT][FONT=&quot]e[/FONT][FONT=&quot]c[/FONT][FONT=&quot]l[/FONT][FONT=&quot]o[/FONT][FONT=&quot]s[/FONT][FONT=&quot]u[/FONT][FONT=&quot]r[/FONT][FONT=&quot]e [/FONT][FONT=&quot]pr[/FONT][FONT=&quot]oce[/FONT][FONT=&quot]s[/FONT][FONT=&quot]s in British Columbia is controlled by the BC Supreme Court. What it means to the home owners is that each step of the foreclosure process has to be approved by the Supreme Court including when to start selling, the purchase price, the terms of sale, and any commission paid.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]9[/FONT][FONT=&quot]. Following are the main steps of the foreclosure process:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]If [/FONT][FONT=&quot]a borrower stops paying the mortgage, he will initially get a letter from the bank or maybe even a phone call. The bank is making sure this is not a simple error of some sort and is giving the borrower a little while to fix the problem.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]A[/FONT][FONT=&quot]f[/FONT][FONT=&quot]t[/FONT][FONT=&quot]e[/FONT][FONT=&quot]r[/FONT][FONT=&quot] [/FONT][FONT=&quot]2~[/FONT][FONT=&quot]3 months the borrower will receive a letter from the bank asking you to pay the arrears in full before a certain date and informing him that a lawyer will be hired to start foreclosure proceedings if you do not.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]If [/FONT][FONT=&quot]the borrower does not pay the arrears as required, the lender will ask a lawyer to start the foreclosure process. The borrower will receive a letter from the lawyer demanding payment of the full amount owing on the mortgage or only the arrears. The borrower is given a deadline after which the foreclosure process will start.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot] first step in the foreclosure process is for the lawyer to file a document named “foreclosure petition”. Within few days after the petition is filed in the court the borrower will be served with a copy. The petition is sent to all interested parties including other mortgage holders, tenants in the property, other lien holders etc. The borrower should follow the instruction of how to file a response to the petition[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]A[/FONT][FONT=&quot]b[/FONT][FONT=&quot]o[/FONT][FONT=&quot]u[/FONT][FONT=&quot]t[/FONT][FONT=&quot] [/FONT][FONT=&quot]a month later there will be the first hearing in the court. At the hearing the judge will give the lender an “order nisi”, and in most cases, it will also give the borrower time to “redeem” the mortgage by paying the full amount owed, plus interest, costs and taxes. This time is called[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot]the “redemption period” and it’s usually 6 months. But sometimes the lender will ask the court for a shorter redemption period.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]Following [/FONT][FONT=&quot]the redemption period of typically six months, the lender may choose to have the property listed for sale by the court or seek an “Absolute Order of Foreclosure” from the court.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]I[/FONT][FONT=&quot]n[/FONT][FONT=&quot] [/FONT][FONT=&quot]the case of the property being listed for sale by the court, the court approves the sale of the property. If the sale does not generate sufficient money to pay the petitioner in full, the petitioner can then seek a deficiency judgment from the court against the borrower.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]I[/FONT][FONT=&quot]n[/FONT][FONT=&quot] the case where an Absolute Order of Foreclosure is granted the petitioner becomes the new registered owner of the property and all other respondents are removed from the title. Once this order has been given by the court, no further action can be taken against the borrower, These Absolute Orders of Foreclosure take place only if the property value equals or exceeds the debt, and the borrower has no assets to apply toward any deficiency.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]F[/FONT][FONT=&quot]o[/FONT][FONT=&quot]r[/FONT][FONT=&quot]e[/FONT][FONT=&quot]c[/FONT][FONT=&quot]l[/FONT][FONT=&quot]o[/FONT][FONT=&quot]s[/FONT][FONT=&quot]u[/FONT][FONT=&quot]r[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]Process in Ontario[/FONT]
[FONT=&quot]10[/FONT][FONT=&quot]. In Ontario, the foreclosure process is very fast, as the proceedings are typically laid out in the mortgage documents.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]11[/FONT][FONT=&quot]. Power of sale was initially developed in Ontario by lenders who wanted a faster way to dispose of defaulted property and recover debt. As a result, they began to include power of sale as provisions in their mortgages and mortgage contracts. Under this the lender would allow them to dispose of property under the borrower's default and without having to resort to the courts. Power of sale is now part of the current Ontario Mortgages Act.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]12[/FONT][FONT=&quot]. In the Mortgages Act there are two types of power of sale: Contractual and[/FONT]
[FONT=&quot]S[/FONT][FONT=&quot]t[/FONT][FONT=&quot]a[/FONT][FONT=&quot]t[/FONT][FONT=&quot]u[/FONT][FONT=&quot]t[/FONT][FONT=&quot]o[/FONT][FONT=&quot]r[/FONT][FONT=&quot]y[/FONT][FONT=&quot].[/FONT][FONT=&quot][/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Contractual power of sale is when the mortgage documents have included power of sale provisions in their mortgage contract.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] Statutory power of sale is when the mortgage documents have not included power of sale provisions. Statutory powers of sale are very rare because the lender will commonly have the provisions in the mortgage contract. However in the case of statutory power of sale the lender can still exercise power of sale as long as the borrower has defaulted for three months or more.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]13[/FONT][FONT=&quot]. Both types of power of sale are started by the lender giving the defaulter a notice after 15 days of non-payment. The notice is given to all parties having a vested interest in the property. This includes subsequent encumbrances, statutory lien holders, or people who have advised the lender in writing, that they have an interest in the property.[/FONT]

[FONT=&quot]
[/FONT] [FONT=&quot] [/FONT]
[FONT=&quot]14[/FONT][FONT=&quot]. The notice is attached to the Mortgages Act, and is called a Notice of Sale Under Mortgage. It advises of the lender's intention to exercise the power of sale, and includes details of the mortgage, such as:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]d[/FONT][FONT=&quot]ate in which the mortgage was made.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]p[/FONT][FONT=&quot]a[/FONT][FONT=&quot]r[/FONT][FONT=&quot]t[/FONT][FONT=&quot]i[/FONT][FONT=&quot]e[/FONT][FONT=&quot]s in the mortgage and the property mortgaged.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]T[/FONT][FONT=&quot]h[/FONT][FONT=&quot]e[/FONT][FONT=&quot] [/FONT][FONT=&quot]amount owing.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]•[/FONT][FONT=&quot] [/FONT][FONT=&quot]A [/FONT][FONT=&quot]w[/FONT][FONT=&quot]a[/FONT][FONT=&quot]r[/FONT][FONT=&quot]n[/FONT][FONT=&quot]i[/FONT][FONT=&quot]n[/FONT][FONT=&quot]g[/FONT][FONT=&quot] [/FONT][FONT=&quot]that if the amount owing is not paid by a specified date, the lender will exercise the sale of the property.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]15[/FONT][FONT=&quot]. If this is a power of sale that is contractual, the borrower will have 35 days to pay, unless otherwise stated in the mortgage agreement.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]16[/FONT][FONT=&quot]. If this is a power of sale that is statutory, the borrower will have 45 days to make payment.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]17[/FONT][FONT=&quot]. The lender cannot do anything further within this redemption period, but by paying the amounts owing, the borrower can redeem the mortgage and save their home from foreclosure.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]18[/FONT][FONT=&quot]. If the redemption period has passed without the borrower making the payment then the lender is legally allowed to foreclose on the property. Under power of sale, the bank has the right to sell the property by auction, private contract, or tender. Usually the property is listed with a real estate agent and placed on the market for sale. This is because the bank has noticed that they can get more for the home at the lowest cost to the bank.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]19[/FONT][FONT=&quot]. Once the property is sold and if there is any surplus, the lender must account to the borrower or borrowers, and other parties with vested interests. In the Mortgage Act it requires that the proceeds of the sale first be applied to the cost of conducting the sale, then to interest and cost owing under the mortgage, then to principal money owing under the mortgage, next to pay any amounts due to outside parties, and finally to pay tenants' security deposits.[/FONT]
 
Brendan,
Could you please comment on how repossession goes in relation to an Irish mortgage in arrears where the mortgage holder goes to England or even Scotland and applies for bankruptcy after 6/3 months. Obviously, in the simplest of cases, the bank can repossess when contacted by/agreed with the OR? Would the owner usually have until then to remove possessions, furniture etc.?
Thanks for the site
 
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