Our client had a very good result in court last week. He lives in west central Alberta and contacted our office a few months ago. In 2014 his property was assessed at over $230,000 by the town. Unfortunately, his town has been hit hard by the economic slowdown in the O&G sector, as well as the government’s war on coal, which resulted in the shutdown of a nearby coal mine. As a result, he lost his job and fell behind on mortgage payments. His bank initiated foreclosure on him as he still owed approximately $100,000 to them. Would you believe his bank obtained an appraisal showing the current value of the property to be only $71,000? Ouch! That is over $130,000 (or approximately 70% of home value) in lost equity in just over 2 years.
Knowing that the bank does not want to sit with the property on their books we worked with one of his family members to submit a tender to court PRIOR to the bank taking possession of the title. The family member offered $50,000 for the property and the bank accepted! In addition, we were able to determine the client does not owe the bank the additional $50,000 (remember he owed $100,000 on his mortgage and the bank only received $50,000). The bank will take the loss, not our client.
Chalk one up for the little guy! Our client was ecstatic that not only did he get to keep his long time residence but he negotiated away $50,000 of debt. In due course he will purchase the property back from the family member and be back in full control, having beat foreclosure and the debt that was weighing him down.
If you are facing a foreclosure, the time to act is now! Contact us today to see how we can help you avoid the loss of your home, your credit and save your money.
