Hey Everyone,
A message landed in my inbox recently. I've changed the details, and I'll tell you that I've received some version of it more than once over the years. It goes like this.
"Hey Andrew, in a pickle here. I'm behind on my mortgage and they've sent me a demand letter. I don't know what happens next and I'm scared to find out. Is there anything I can even do at this point?"
I answered him privately. I'm answering here too, because for every person who sends that message, more are sitting on the same situation saying nothing. If that's you, this one's yours.
And before anything else, no judgment. People fall behind because a job ended, a marriage ended, a renewal jumped the payment, a body gave out at the wrong time. I've never met anyone in arrears because they didn't care. What matters now is what you do next.
What that letter actually is.
A demand letter is the lender's lawyer formally asking you to bring the mortgage current by a certain date. It's serious. It is also not a court order and not an eviction. No judge is involved yet, and everything is still fixable directly between you and the lender.
The worst response is the one most people choose, which is putting it in a drawer. Silence is the only move that guarantees the bad outcome.
How much road is left.
I'm telling you this so you understand the timeline, not so you wait.
In BC, a lender can't just take a house. Foreclosure runs through the Supreme Court, and a judge signs off on every step. If the letter goes unanswered, the lender files a petition, you get served, and you have 21 days to respond. At the first hearing the court sets a redemption period, usually six months in BC, during which you can still catch up the arrears, refinance, or sell the home yourself and keep your equity. File your response and show up to that hearing, even without a lawyer. Judges give time to people who are engaged.
That's the road. The goal is to get off it early.
Step one. Call the lender.
Your lender does not want your house. Foreclosure costs them money and they lose on most of them. What they want is a performing mortgage, so they have real tools for this. Repayment plans that spread the arrears out. Adding the arrears to the balance and starting fresh. Stretching the amortization to bring the payment down.
None of those get offered to voicemail. Make the call before they make theirs, because the earlier you're at the table, the better the menu.
Step two. Put your equity to work.
If you've owned for a while, the equity in the house may be what saves it. A refinance or a restructure can clear the arrears and reset the mortgage into a payment that actually fits your current life. Sorting out whether that's possible, and which lender would do it, is exactly the kind of thing I help people figure out. It costs nothing to find out where you stand.
Step three. If the house no longer fits, sell it on your terms.
Sometimes the math has changed for good. Even then, selling on your own timeline at market price, with your equity coming back to you, is a world apart from a court-ordered sale. If it comes to selling, sell it yourself, early, while you're the one in control.
If this is you.
Hit reply or call me. It's confidential, it costs nothing, and the conversation is easier than the one you're having with yourself at 2 a.m. The earlier you reach out, the more options are open.
And if you're not behind but can see it coming, a renewal that's going to hurt or a budget that's fraying, reach out now. The easiest version of this problem is the one we catch before the first missed payment.
-Andrew
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