So what is a foreclosure? If you have been following the news over the last few years I am sure you have heard the word Foreclosure several times. In simple words, Foreclosure is the situation in which a homeowner is unable to make payments on his or her mortgage, so the lender, typically a bank, can seize and sell the property.
The process used to enforce the terms of the mortgage contract and seize the property differs across Canada. British Columbia law requires the lender to get court permission before it can sell a property. This is called a "Judicial Sale," and it means that lenders must apply to the court for permission to sell. It can take 9 months or more from the time a homeowner stops paying his mortgage until the bank can actually sell it.
Buying a property pre-foreclosure means that even though the lender has begun the foreclosure process, you step in and buy the property before the bank takes ownership. It presents an opportunity for a real estate investor of not only finding great bargains but also helping a homeowner in trouble to save their credit and to move on with their life. One way to find pre-foreclosures is to use a foreclosure list service. These services usually research the courts files and provide lists of recently filed foreclosure cases.