I have a mortgage with 1500 per month payments. In June, I missed the payment (returned by my bank as NSF). I live "hand to mouth" and have terrible credit. I made July, August and September payments. My mortgage company is now saying that they are issuing a demand notice and commencing action on my home. I told them I could catch it up in full by the end of the year. They will only give me to October 15. This sounds harsh, but in fairness, it is not the first time I have fallen behind. I have always come through, but takes awhile. What does the demand letter mean? Can I "stall" until end of year when a bonus would catch it up again or will they be able to foreclose because I am in default. They say I'm in default by 5 months as they applied July payment to July etc instead of applying to oldest outstanding first? What option do I have?

Given the scenario described I believe the bank has the right to start foreclosure action. The only suggestion I can make is to meet with the bank, or their lawyer if action has started, to see if you can make arrangements to stop it. You may also want to consider selling the house to preserve any equity you may have, rather than losing it all in the foreclosure legal costs.

Ann Clarke
phone: (403) 296-2972
aclarke@moneyhelp.ca