Foreclosure proceedings begin, quite logically, with a borrower failing to do something required under       the mortgage. Most commonly, this is defaulting on payments. Under the Acceleration Clause in the       mortgage agreement, the lender sends a Demand Letter to the borrower. This letter advises the       borrower of the amount owing, with a request to bring the payments up to date. The letter also warns       that if the payment is not made within a short about of time, (usually a week or two) the lender will       require payment of the full amount due, and begin to sue the borrower.       If there is no response, the lender often does sue the borrower by submitting an Originating Notice       and a Statement of Claim to the Supreme Court of Nova Scotia. The Originating Notice advises the       court that the lender is making a claim against the borrower, and the borrower may dispute the claim       by filing a Defense within ten days. The Statement of Claim describes the details of the claim,       including details of the mortgage:           The amount loaned.           The property used to secure the mortgage.           The interest rate.           Any subsequent agreements that changed the initial mortgage.           A detailed breakdown of the money still owed.       The lender also states what it is claiming, including payment of the principal and interest       outstanding, payment of any expenses incurred by the lender as a result of the borrower’s default       and possession of the property. The lender also claims an Order of Deficiency Judgment should the       proceeds from selling the property not cover the debt and lender expenses.       The lender then applies to the court for an Order of Foreclosures, Sale and Possession. At this time,       the borrower may apply to have the mortgage “reinstated,” which allows the foreclosure action be       discontinued if the borrower pays all arrears and the costs incurred by the lenders as a result of their       default. If the borrower does not apply for reinstatement, the lender proceeds with filing the order, and       has to prepare and file a number of documents:           An affidavit confirming that the defendant(s) were served with the Originating Notice and             Statement of Claim, and allowed ten days to file a Defense.           A notice advising the court that an Order of Foreclosure, Sale and Possession is being sought.           An affidavit providing a full history of all charges and payments to the mortgage account, as well             as a copy of the original mortgage and any documents by which the original mortgage was             renewed or amended.           An affidavit containing a certificate listing any interests recorded against the property (liens,             judgments, other mortgages, etc.) since the borrower became owner.       These documents enable the court to determine whether any other parties may be affected by the       foreclosure.       If the Order of Foreclosure, Sale and Possession is granted, it:           Sets out the amount owed by the borrower.           Gives the lender possession of the property.           States that the equity of redemption of the property will be “forever barred and foreclosed” unless              the borrower pays the amount outstanding before the property is sold.           States that the property will be sold at a public auction.       In Nova Scotia, a Sheriff at the public auction sells the property. The lender must notify the       borrower(s) with liens or judgments against the property at least 20 days prior to the auction. The       lender must advertise at least twice in a local newspaper.       The procedure at the auction is governed by, The Standard Procedure for Sheriff’s Sales by Public       Auction – Instructions to the Sheriff. Among other things, the instructions set out what the lender       must pay to purchase the property, the deposit that must be paid by any purchaser, details of how       the deed will be delivered to the purchaser, and how the sale proceeds will be dispersed. The       property is sold to the highest bidder at the auction, and this purchaser must pay 10% pf the       purchase price at the time of the auction. The balance is payable within 20 days.       Once the property is sold, the Sheriff prepares a report that sets out the details of the sale,       including:           The name of the purchaser.           The purchase price.           How the sale proceeds when distributed.           A record that Sheriff has given a deed of property to the purchaser.       The lender’s lawyer than applies to the court for an order confirming the sale. The lender must file a       number of documents, including the Sheriff’s report, and an affidavit stating that the auction was       properly advertised and appropriate notice was given. Only the lender and the court are involved in       this application, and there is no formal hearing before a judge. Rather, a court official, called a       Prothonotary, considers the application outside of the courtroom. If the Prothonotary is satisfied that       the foreclosure was conducted properly, an order is granted confirming the sale has occurred, and       the foreclosure is complete.       If the property is not sold at the auction, the lender may purchase the property for the amount the       instructions set out. Then, the property can be sold by “private contract”: Listed with a real estate       agent.       While ForeclosureCanada.org strives to keep the information on this site accurate and current,       ForeclosureCanada.org cannot guarantee the accuracy, completeness, or timeliness of the       information.       << Back                                                                                                                        Top