Chapter 21 Flashcards
Once the Statement of Claim for Debt and Possession is served to the borrower under a power of sale, how long will he/she have to file a Statement of Defence?
Select one:
a. 25 days
b. 10 days
c. 20 days
d. 15 days
Correct Answer: 20 days
Rationale: 20 days: Once the Statement of Claim for Debt and Possession is served to the borrower, he or she has twenty days to file a Statement of Defence. If the borrower fails to file this notice, the lender will obtain a default judgment from the Court as well as a Writ of Possession. The Writ is then filed with the sheriff in the jurisdiction in which the property is located, and the sheriff arranges for eviction.
Relevant section(s) of the textbook: 21.1 Power of Sale
The correct answer is: 20 days
This term refers to the process of using the courts to take title to the mortgaged property, thereby extinguishing all rights that the borrower or any other party may have in the property:
Select one:
a. Redemption period
b. Notice of sale
c. Foreclosure
d. Demand letter
Correct Answer: Foreclosure
Rationale: Foreclosure is the process of using the courts to take title to the mortgaged property, thereby extinguishing all rights that the borrower or any other party may have in the property. This process can be time consuming, taking upwards of six months and is also considered to be a harsh remedy since the lender ultimately becomes the owner of the property leaving the borrower with no interest in it.
Relevant section(s) of the textbook: 21.2 Judicial Sale, Foreclosure and other Remedies
The correct answer is: Foreclosure
This is a document provided by the Courts that allows the lender to take possession of the borrower’s property:
Select one:
a. Power of Sale
b. Statement of claim for debt and possession
c. Notice of Sale
d. Writ of possession
Correct Answer: Writ of possession
Rationale: Writ of possession: A document provided by the Courts that allows the lender to take possession of the borrower’s property. This is enforced by the local sheriff.
Relevant section(s) of the textbook: 21.1 Power of Sale
The correct answer is: Writ of possession
Once a borrower has been given a redemption notice under a power of sale, how long will he/she have to exercise their options?
Select one:
a. 30 days
b. 25 days
c. 45 days
d. 35 days
Correct Answer: 35 days
Rationale: The borrower has thirty-five days after notice is provided, which equates to thirty-seven days since the date of the notice and the final day of the redemption period are not included, in which to exercise these options. If the borrower does not pursue the options available, the lender may file what is called a Statement of Claim for Debt and Possession with the courts for possession.
Relevant section(s) of the textbook: 21.1 Power of Sale
The correct answer is: 35 days
This is a document that is used to inform the borrower of the lender’s intent to recover monies owing to it when the borrower has defaulted on his or her obligations under the mortgage contract:
Select one:
a. Power of Sale
b. Writ of possession
c. Statement of claim for debt and possession
d. Notice of Sale
Correct Answer: Notice of Sale
Rationale: Notice of Sale: A document, prescribed by the Mortgages Act, R.S.O. 1990, c.M.40, that is used to inform the borrower of the lender’s intent to recover monies owing to it when the borrower has defaulted on his or her obligations under the mortgage contract.
Relevant section(s) of the textbook: 21.1 Power of Sale
The correct answer is: Notice of Sale
This process was developed by Ontario lenders as a faster remedy than the typical remedy of foreclosure:
Select one:
a. Power of Sale
b. Sale Remedy
c. Power of Attorney
d. Power Remedy
Correct Answer: Power of Sale
Rationale: Power of Sale: In Ontario, the most common method used is the power of sale process. This process was developed by Ontario lenders as a faster remedy than the typical remedy of foreclosure. Details of this proceeding are normally included in the Standard Charge Terms, but they are also provided through the Mortgages Act, R.S.O. 1990, c.M.40.
Relevant section(s) of the textbook: 21.1 Power of Sale
The correct answer is: Power of Sale
This is a document sent by the lender’s lawyer that requires the defaulting borrower to pay the lender the monies owed on the defaulted mortgage:
Select one:
a. Eviction notice
b. Demand letter
c. Notice of sale
d. Foreclosure
Correct Answer: Demand letter
Rationale: Demand letter: A letter sent by the lender’s lawyer that requires the defaulting borrower to pay the lender the monies owed on the defaulted mortgage.
Relevant section(s) of the textbook: 21.2 Judicial Sale, Foreclosure and other Remedies
The correct answer is: Demand letter
In this process, the lender may commence an action for sale in which the court oversees the sale and the distribution of proceeds after the sale. There are several components, including:
- Overseen by the Court
- The lender must apply to the court for approval to sell the property, and for approval of the sale
- The lender files a lawsuit against the borrower and other liable parties
- Once ordered, the owner can no longer list the property for sale, and any listing agreement is cancelled
- Upon sale, the property is transferred free and clear of debts, which are extinguished by the Court
- Great deal of Court involvement throughout the process
Select one:
a. Power of sale
b. Notice of sale
c. Judicial sale
d. Foreclosure
Correct Answer: Judicial sale
Rationale: In a judicial sale, the lender may commence an action for sale in which the court oversees the sale and the distribution of proceeds after the sale. There are several components of a judicial sale, including:
* Overseen by the Court
- The lender must apply to the court for approval to sell the property, and for approval of the sale
- The lender files a lawsuit against the borrower and other liable parties
- Once ordered, the owner can no longer list the property for sale, and any listing agreement is cancelled
- Upon sale, the property is transferred free and clear of debts, which are extinguished by the Court
- Great deal of Court involvement throughout the process
Relevant section(s) of the textbook: 21.2 Judicial Sale, Foreclosure and other Remedies
The correct answer is: Judicial sale
This is a transfer by the borrower of ownership to the lender in exchange for releasing the borrower from any further liability.
Select one:
a. Foreclosure
b. Judicial sale
c. Power of sale
d. Quit claim
Correct Answer: Quit claim
Rationale: A Quit Claim is a transfer by the borrower of ownership to the lender in exchange for releasing the borrower from any further liability. This happens infrequently since it would only be beneficial to the borrower if there was no equity in the property, and therefore would not be beneficial to the lender. The lender and borrower would have to agree to this arrangement voluntarily.
Relevant section(s) of the textbook: 21.2 Judicial Sale, Foreclosure and other Remedies
The correct answer is: Quit claim
This is a document filed with the Courts outlining a lender’s claim against the borrower:
Select one:
a. Writ of possession
b. Statement of claim for debt and possession
c. Power of Sale
d. Notice of Sale
Correct Answer: Statement of claim for debt and possession
Rationale: Statement of claim for debt and possession (commonly referred to as a Statement of claim): A document filed with the Courts outlining a lender’s claim against the borrower
Relevant section(s) of the textbook: 21.3 Key Terms and Definitions
The correct answer is: Statement of claim for debt and possession
