Holly purchased a home in Manitoba. The home was mortgaged for $225,000. She lost her job and missed three mortgage payments. The bank decided to exercise its rights under the mortgage. What can it do?

Question

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In Canada, when a homeowner defaults on their mortgage, the bank typically follows a process that involves several steps. First, they may issue a default notice to the homeowner, indicating that the mortgage is in default and giving the homeowner a chance to rectify the situation. If the default is not remedied, the bank can then invoke the acceleration clause, which demands that the entire balance of the mortgage be paid immediately. If the homeowner is still unable to pay, the bank can proceed to obtain an order for foreclosure, which allows them to take possession of the property and sell it to recover the owed amount. This process is sequential and involves first invoking the default notice clause, then the acceleration clause, and finally obtaining an order for foreclosure.

Holly Purchased a Home in Manitoba