tag:blogger.com,1999:blog-32931256.post8651655254493975168..comments2024-03-22T05:20:44.167-07:00Comments on The Disaffected Lib: When Banks Won't ForecloseThe Mound of Soundhttp://www.blogger.com/profile/09023839743772372922noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-32931256.post-40028259327032725832009-03-31T10:00:00.000-07:002009-03-31T10:00:00.000-07:00That's been a common feature of Land Titles jurisd...That's been a common feature of Land Titles jurisdictions. PoS was commonly preferred if you wanted to pursue the mortgagor for the deficiency. I think Alberta is the exception where the law doesn't allow personal covenants on mortgages. There were plenty of stories of Calgary homeowners simply going into the bank and putting the keys on the manager's desk and then being on their way.<BR/><BR/>In the case where the mortgagor was a marginal borrower in the first place and the bank doesn't stand a snowball's chance of recovering on the deficiency, it's usually more expedient to simply foreclose.<BR/><BR/>What seems to be putting banks off is that, after in-house costs plus legal, court and realtor fees, they risk winding up with title to a property that's all but unsaleable yet they're subject to municipal requirements that they maintain the house and property in any event.The Mound of Soundhttps://www.blogger.com/profile/09023839743772372922noreply@blogger.comtag:blogger.com,1999:blog-32931256.post-14142005325970398832009-03-31T09:07:00.000-07:002009-03-31T09:07:00.000-07:00As an interesting side note, we learned in my mort...As an interesting side note, we learned in my mortgage law class last year that foreclosure is already rare in Canada. Some jurisdicitions have even completely done away with it. Instead banks use their "power of sale".<BR/><BR/>The difference is that instead of simply taking over title to the house and then selling it to recover the value, they can simply sell it out from under the defaulting owner (first they have to provide notice of course).<BR/><BR/>If memory serves me, the biggest difference is that if they forclose, all they get is the value of the house. If they exercise their power of sale and do not recover the entire debt, the indebted party is still on the hook for the balance (subject only to the bank's obligation to seek a fair value for the property. No wonder the banks are not interested in foreclosure!<BR/><BR/>What strikes me as surprising here is that foreclosure was supposed to be useful during times of economic stress. It allows the bank to take over the property and make what money they can with it. I guess the bank is not interested in getting into the landlord business.Fishhttps://www.blogger.com/profile/02726265917958181039noreply@blogger.com