Foreclosure Process in Alberta – Everything You Need to Know

Foreclosure process in Alberta is nothing but anyone plans or hopes, yet it happens all around us all the time. And as sad as it might be to know that someone had their property foreclosed or for your property to be the one that is foreclosed, the worst bit would be learning later on that there are costly mistakes you could have avoided.

So, in as much as few people want to openly talk about foreclosures, we think it’s time more of us held such discussions. In this piece, we’ll take you through everything you need to know about foreclosures in Alberta, the foreclosure process in Alberta, and how to stop foreclosure, among other things.

Before we look into the details of the foreclosure process in Alberta, it’s worth noting that the entire foreclosure process is one that is quite involving and even complicated. This is primarily because foreclosure is the process that often allows lenders the opportunity to recoup principal balances and arrears on mortgages that are in default. 

However, these two aren’t the only reasons why your mortgage could be in foreclosure. There are other contributing factors, and often, these are issues that arise when people fail to read the fine print, a situation that leaves them stuck with huge bills and high monthly payments/ repayments.

These issues include:

  • Failure of an applicant to make their mortgage payments in a timely manner
  • Not paying the homeowner taxes
  • Failing to pay the HOA fines and dues on time
  • Failure to carry the right home insurance coverage
  • Allowing too much damage to the property and failing to make the repairs on time

In Alberta, for example, the home foreclosure process is known as a Judicial Sale. It’s a very lengthy process, and you may want to consult your attorney (one that specialised in real estate) or more information about foreclosures in Alberta, and more importantly, for you to avoid some costly mistakes.

So, are foreclosures handled in Alberta?

Typical Steps in Alberta’s Foreclosure (Judicial Sale) Process

The next sections of this article focus on all you need to do about and during the judicial sale process. However, before we delve into that whole process and if you think that a foreclosure on your property is looming, you need to know that at the end of the day, all the costs associated with foreclosures and the legal costs involved will fall on you. So, with lenders and insurers pursuing deficiency of judgments after foreclosures as they attempt to recover the balances from the mortgage and other costs, you need to be apprised of all the necessary information about foreclosures. 

Also, an understanding of foreclosures, specifically in Alberta, is crucial.

If you live in Alberta or you’ve purchased the property in Alberta, you should know that foreclosure is defined as the process in which a lender, often the bank, takes control and ownership of named property from the owner because that owner owes the lender money, which often arises when the borrower falls behind in making the payments. 

The foreclosure process in Alberta is different from that in other provinces, and it’s often referred to as the administration of the Law of Property Act.

So, what are the steps for the foreclosure process in Alberta? 

1. Initial Contact Form Lender – Payment Default Notice from the lender

This is the first step taken in the foreclosure process. It’s initiated by a defaulted payment. The payment default often happens when a borrower misses at least one of their scheduled mortgage payments. When this happens, the lender sends a notice of this missed payment. 

In most cases, mortgage payments are due on the first day of each month, but most lenders give a 15-day grace period, meaning that the mortgage payment’s last due date is the 15th of the month. After the 15th, the lender not only starts to charge the late payment fee but also sends the borrower notice of the missed payment.

If after two months the lender still hasn’t paid, the lender takes the next step – issuance of the demand letter. 

The default notice given in Alberta involves the lender sending the borrower a letter and/or a call after one missed payment. 

2. Demand Letter

A demand letter follows the notice of default, and the lender often issues the demand letter when the property owner or the borrower doesn’t respond to the contact made initially. The demand letter is often sent after the borrower missed two payments. In this letter, the lender demands that the arrears are paid in full, immediately, to prevent foreclosure. This notice may also come from an attorney contracted by the lender or from a collection agency.

The good news is that despite the issuance of the demand letter and its seriousness, most lenders are still willing to come to an arrangement with the borrower, especially if the borrower is willing and able to catch up on the missed payments. In such instances, borrowers would behave to remit the balances and the late fees within a 30-day period. You may want to talk with your bank about these terms, and also keep in mind that different Provinces have different terms. 

3. Statement of Foreclosure Claim           

If nothing can be done about the defaulted balances, and the lender kicks off the foreclosure processes within the bounds of Alberta, then the owner/ borrower will receive a document known as the Statement of Claim. This is a document filed with the courts, specifically, the Court of Queen’s Bench. 

The Statement of Claim notifies the defaulting party of the action(s) undertaken by the lender to not only secure title for the asset but also to reclaim the mortgaged home. 

Note that this step is also handled by attorneys in the real estate scene, and the paperwork involved, plus the professional involvement means that the borrower would likely be liable for the legal fees and all other additional costs that may arise. 

Possible Mortgage Foreclosure Options

Wondering if there’s something you could do about your mortgage foreclosure?

Potential Actions for Borrowers Facing Foreclosure

1. File the Statement of Defense 

According to Alberta’s laws, a borrower will have a maximum of 20 days to file for a document known as the Statement of Defense upon receipt of the Statement of Claim. This is allowed even if the borrower is in breach of the terms of the mortgage contract. As long as the borrower shows a desire to remedy the matter in due time, then this document would offer the needed reprieve. 

But there’s one catch; submitting the statement of defense to Alberta courts is a very expensive process. Also, there is no guarantee that your application will be approved because there are few acceptable reasons that would lead to the approval of the Statement of Defense. To increase the chances of approval, make sure that all the information you provide is accurate and that the appraised value isn’t too far off the base value of the property. 

2. Do nothing

Taking no action and ignoring the Statement of Claim might be one of the things you could do as a borrower whose home is about to be foreclosed on, but not acting on the Statement of Claim often pushes the lender to issue another statement – the Noted in Default Statement. Naturally, this expedites the foreclosure process because the lender has the right to lay claim to your home in a matter of days rather than months. So, if you can’t think of a way out, doing nothing might be a better approach. With this statement, the lender would have the right to take any action on or against the mortgaged property without having to notify you (the borrower), which often means that you could be without that property in a matter of days. So, never ignore the Statement of Claim. 

3. Choose to Repay the Arrears Within the Redemption Period

If you don’t want to lose your home and you’re fighting the disclosure all the way, you could still win on repaying all the balances on your mortgage during the redemption period. It’s quite interesting to note that most lenders and even attorneys will not inform you of this option, yet, you still have a window to repay the due balances as long as the courts haven’t given their final decree of the property’s disclosure. 

You may also not know this, but as a borrower in Alberta, you main the right to redeem the property during the period between the start of the foreclosure process and the final decree. This period is the foreclosure redemption period, and it often spans a few months – 3 to 6 months. During this period, debtors get the chance of ‘redeeming’ the mortgage on their home, bringing all the mortgage details/ payments to the current status. 

And if your s is a high-equity property, you’d find that lenders/ banks are open to more flexible payment arrangements. 

4. Quit Claim

If you don’t want to fight the foreclosure, other than do nothing, you could quitclaim. In doing so, you choose to hand over the property’s title to the bank/ lender. 

Note, however, that this is not the most recommended option where you are trying to avoid foreclosure. And most importantly, you must have legal counsel before this – despite losing the property and the rights to what you called home for a long time, quitting the claim means that you could possibly incur more costs in penalties. 

5. Demand of Notice 

The other step you could take is to issue a Demand of Notice statement. This is a crucial statement that shows the borrower’s desire to be apprised of all that happens and regards the state of the home foreclosure. Whether you are trying to get extra time to save up and pay for the home or you’re trying to sell your home by yourself, this statement ensures that there is no room for surprises. 

6. Consenting to the foreclosure

With the right legal consultation and recommendations, you could consent to the foreclosure. Doing this allows you to stay in your home for a longer period (stipulated in writing) while your lawyers negotiate certain agreements with the lenders. Just keep in mind that the involvement of lawyers often results in steeper costs, which could only worsen the situation you are in. 

How To Stop Foreclosure

Dealing with foreclosures is one of the most stressful and most expensive things you may have to ever do, even when you remain hopeful that you could salvage things and stop the foreclosure process. But foreclosure is not entirely a done deal, and learning how to stop foreclosure goes a long way in helping you keep your home. There are some things you could still do to stop foreclosure from going through:

1. Negotiate With Your Lender

If you think that things are falling off the rails and you could lose your home, the first thing you could do to intervene is to negotiate with the lender/ bank. Negotiate a new mortgage repayment plan – you’ll be surprised to know that most lenders are willing to negotiate repayment plans rather than foreclose on the property. The only catch is that you’d have to play by their rule, and you’d have to make the payments regularly. 

The lenders often give you two options – mortgage repayment or repayment plan modification. Repayment is pretty much a straightforward process – pay the owed money, then keep making the remaining monthly payments, although you may have to pay a little more than you previously paid each month.

Alternatively, you could settle for a payment modification approach. Though complicated, it’s popular. However, it calls for significant changes in the lifestyle of the homeowner – the expenses would have gone up significantly, or the income reduced drastically. Whichever the case, modification plans result in lowered monthly payments and longer repayment periods. You could also choose a modified plan if you expect a fluctuation in your income in the future. Just make sure that you talk to the lender sooner rather than later. 

2. Reinstate Your Loan

This means bringing your mortgage loan to its current status to mitigate foreclosure. For this to happen, you’d have to pay up the full balance amount, as well as the fees and penalties incurred as a result of the delinquency. This is also called redeeming the loan. 

3. Forbearance Plan

When you forebear a loan, it means that the lender must suspend mortgages and other payments for a specific amount of time, often 3-6 months. After the lapse of the forbearance period, the homeowner would have to prepay everything owed, including deficiencies. If you are facing a job loss or a big unexpected expense, this would be a good option for you. 

4. Sell Your Property

If all the options above fail or are not ideal for you, your last resort would be selling the property. If you can sell the house, do so, but make sure that the guys handling the foreclosure keep you in the loop as the foreclosure terms are sorted. The great thing about selling is that it saves your credit score and it allows you to get back on your feet.


So, if your home is about to be foreclosed, read this article to ensure that you have all the right information to save money and avoid foreclosure mistakes. If you are looking for ‘Foreclosure help Calgary’ or ‘Foreclosure help Alberta,’ reputable places like Mr. Home Buyer can help you avoid common foreclosure pitfalls. Even when you are at your wit’s end, this comprehensive guide on the Alberta foreclosure process will save you money and give you back some form of sanity.

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

Get An Offer Today, Sell In A Matter Of Days...

  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published. Required fields are marked *