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In Auckland, New Zealand, foreclosure refers to the legal process financial institutions use when a mortgagee cannot repay their mortgage loan. The lender, often a bank, can recoup losses by seizing and selling the mortgaged property. This follows after a legal process referred to as 'mortgagee sale' which typically takes several months and requires notices to be duly served to the defaulter explaining the intended action.
Engaging a lawyer may become necessary in disputing the foreclosure validity, negotiating with the lender or simply understanding your rights and obligations. Legal representation could help stop a foreclosure in certain situations, or help you negotiate a postponement. Moreover, a lawyer can dispute if the lender did not follow proper legal processes, or committed an act of 'oppressive conduct' in handling the mortgage loan.
In New Zealand, the Property Law Act 2007 outlines measures for handling mortgaged property including notice requirements which the lender must fulfill in case of default. For instance, a Notice of Default must be served 20 working days before a Notice of Sale. Ultimately, if the defaulter has not satisfied the loan, the property can be listed for sale after a Notice of Sale is issued. Property auctions are publicly notified, offering everyone an equal opportunity to bid.
Although difficult, foreclosure proceedings can be potentially halted if you negotiate with the lender, pay your arrears, or legally challenge the foreclosure proceedings on legitimate grounds.
Although not mandatory, having a lawyer can greatly help, given the complexity of foreclosure laws and your rights as a consumer under the Credit Contracts and Consumer Finance Act.
This refers to when the bank sells a property due to a default on mortgage by the property owner. Mortgagee sales are also sometimes known as foreclosures.
Foreclosure indicates the borrower has defaulted on their loans, which is recorded in their credit history. This could significantly lower one's credit score, making it difficult to secure future credit or loans. Moreover, the borrower loses their ownership of the property.
Once the property is sold at auction, the original property owner generally does not have an opportunity to reclaim the property.
Legal advisory services such as Auckland District Law Society or Citizens Advice Bureaus can provide accessible and often free legal help. Citizens Advice Bureaus also have a comprehensive website with specific information about foreclosures. Local public libraries may also house relevant guides and law books.
If facing a foreclosure situation, it is advisable to seek legal advice at the earliest. Consult with a lawyer who specializes in foreclosure cases as quickly as possible to understand your rights and options. Do address any communication from your bank promptly and keep a record of all your mortgage and loan documents.
