This page gives legal information about residential mortgages. It does not give legal advice, and does not replace advice from other professionals, such as a credit counsellor, licensed insolvency trustee in bankruptcy, or mortgage advisor.  Look at the resources at the end of this section for help if you are having financial difficulties.

Talk with your lender right away if you are having trouble making your mortgage payments.

The process set out below is known as the “simplified procedure”. It applies to most foreclosures. However, the process may be different in your situation.

Foreclosure: a legal process which allows the lender to get ownership of the property and to sell it and use the sale proceeds to pay off the mortgage debt, legal costs, Sheriff fees and other costs.

Lender: A lender can be a bank, credit union, insurance company, private individual, or loan company.

Mortgagor: the borrower, or the person(s) borrowing money from the financial institution.

Mortgagee: means the lender, or the financial institution lending you money.  

Mortgage a loan agreement or contract between a borrower and lender, where the borrower’s property is promised as security for the loan. Mortgages can take many forms and can be taken by a mortgagee to secure obligations of the borrower whether or not the money being borrowed is for the purchase of the property.  Here, we are talking about a mortgage as a way to borrow money using the home you are buying as security for the loan.

Usual steps in a foreclosure
1. Default Borrower defaults on mortgage
2. Demand Letter Lender sends Demand Letter to borrower
3. Notice of Action and Statement of Claim If demand letter fails, the lender starts legal proceedings and serves the borrower, in person, with court documents starting the foreclosure process (Notice of Action & Statement of Claim)
4. Defence After getting the Notice of Action and Statement of Claim, the borrower files a defence or applies to court for other relief within: 15 business days, if served in Nova Scotia; 30 business days, if served in Canada, but outside Nova Scotia; 45 business days, if served outside Canada.
5. Motion to Court for Order for Foreclosure, Sale and Possession If no agreement is reached, and no defence is filed within the required time after Notice of Action and Statement of Claim is served on the borrower, or any defence is unsuccessful, the lender makes a Motion to court for Order for Foreclosure, Sale and Possession
6. Order for Foreclosure, Sale and Possession issued by court Court grants Order for Foreclosure, Sale and Possession
7. Notice of sale of the property at Public Auction Notice is published twice in a local newspaper, with a copy sent to borrower by regular mail at the mortgaged property (or last known address if different from mortgaged property) at least 15 days before sale
8. Sheriff’s sale of the property by Public Auction Property is sold at a public auction in the county where the property is located. Generally, homeowner (borrower/mortgagor) should be ready to move out on the date of the public auction.
9. Claim for Deficiency or Surplus after the sale Application(s) to court to deal with any deficiency or surplus based on the proceeds of sale.
10. Confirmatory Order The lender obtains an order from the court confirming that the foreclosure is complete

 

Reviewed December 2017