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Foreclosure, also known as mortgagee sale in New Zealand, is a legal recourse process initiated by a lender to recover the balance of a loan from a borrower who has defaulted on repayments. In Whakatane, as in the rest of New Zealand, the standard part of any mortgage agreement allows the lender to sell the property without having to go to court if the borrower defaults. This process is overseen by the Property Law Act, the Credit Contracts and Consumer Finance Act, and the Commerce Commission.
The process of dealing with a foreclosure situation might be overwhelming and complex for those inexperienced in the area. Retaining a lawyer can be helpful in reviewing mortgage documents, negotiating with lenders, identifying unlawful lending practices, representation during court proceedings, and advising on potential defenses or alternative options such as bankruptcy, refinancing or a short sale. It's crucial to have professional legal advice to ensure your rights are protected and to navigate through the foreclosure process.
Under New Zealand law, lenders/creditors must follow a rigid process before selling a property to recover their debt. This includes issuing a demand for the missed payments, providing a notice of default, followed by a Property Law Act notice, and finally a notice of sale. Additionally, the Property Law Act mandates that the lender should get the best price possible for the property. The Credit Contracts and Consumer Finance Act also provides certain protections for borrowers, such as accurate and timely disclosure of information.
Yes, it's possible to halt the foreclosure process by clearing all the arrears, often including the lender's legal costs and other charges, any time before the property is sold.
No, lenders typically initiate foreclosure after multiple missed payments. They are legally bound to follow certain steps before selling your property, including giving you notice and time to rectify the payment default.
No, the Property Law Act places a responsibility on the lender to take reasonable steps to obtain the best price reasonable in the circumstances.
If the proceeds from the sale don't cover the outstanding debt, the lender could obtain a judgment for the deficiency and potentially seize other assets or wage garnishment to pay off the remaining balance.
Yes, generally speaking, you can remain in your property until it is actually sold. However, you must continue to maintain it to up to reasonable standard.
Resources that could help with foreclosure-related issues include the Commerce Commission for any issues related to lending practices, the Disputes Tribunal for minor disputes, and Tenancy Services for tenancy-related issues. Additionally, Citizens Advice Bureau and Community Law Centres can help with legal assistance and advice.
If you are facing foreclosure, however, it's important to seek legal advice as soon as possible. Contacting a lawyer specializing in foreclosure or property law can offer you the counsel and representation you need to navigate the process and ensure your rights are protected.
