BEWARE: Facebookers Foreclosed In Public Facebookers Beware – Your Lenders Can find you

Could you imagine finding out that someone you know is going into foreclosure? Even worse, you and your entire social network community find out on facebook®? Well, a lender who was attempting to foreclose on a home in Australia served notice on a defaulting borrower via facebook®. Since then, attorneys in New Zealand, England and Canada have all authorized mortgage lenders and their attorneys to serve borrowers with foreclosure notices via facebook®.

So what does all this mean? The obvious questions come to mind. What if you accidentally missed your mortgage payment because your paycheque didn’t clear in time or you changed bank accounts and forgot that your mortgage was automatically coming out of your old account? What if you were in a car accident? Would your facebook® friends find out that you were being foreclosed, even before you? What about those Privacy Laws?

To better understand what would and would not happen, one needs to understand a few things about the foreclosure process in Canada. When a borrower misses their mortgage payment, they receive a phone call from their lender letting them know that the payment as missed and needs to be paid immediately. If the borrower continues not to pay, the lender then starts the foreclosure process by way of an initial demand letter from the lender or the lender’s attorney demanding that the borrower pay back the entire loan balance immediately.

Again, if the loan is not paid off in full, then the lender proceeds to foreclosure on the home by way of several notices and documents to the borrower along with a court date. The lender asks the court to allow the foreclosure to proceed. The way those notices aredelivered by the lender is the focus here.

All court documents must be attempted to be delivered in person. Service in another manner only occurs if the person could not be served personally because they couldn't be found, were in hiding, etc. A person could simply not answer the door to delay the process.

Then the court is asked to approve an order for substitutional service in an alternative manner. In those cases, the process server or law firm would have to suggest to the Court how service would most likely get the matter to the person's attention. If there was a known email address or facebook® page that was current and apparently in place and being used by the person, the substitutional service order could provide for service in that manner.

The mortgage itself falls under “Service of Demands” which is largely based on the contract. Most mortgages (contracts) allow for mail or personal service. So, if the lender has complied with mail or personal service first, then they can likely proceed with alternate methods. If a borrower has an email, it’s okay for the lender to use it. If the borrower has a facebook® page, the lender can use it as well.

Some may call it defamatory, however a practicing Real Estate Foreclosure Lawyer in BC said “If the money is owed and foreclosure is impending, truth is a defense and the existence of a foreclosure proceeding is in the public domain. So, risk of a lender actually being liable for defamation by posting a demand on facebook® is probably not high.” Foreclosure proceedings are located at courthouses across Canada which are accessible by the public, therefore already public in nature.

It does not appear that there is any law(s) restricting lenders from using facebook® here in Canada as an alternate method to not only find borrowers, but also serve them.

However, as a major Canadian Bank’s Senior Recovery Officer said “we are not using facebook® and we are not aware of any other Canadian lender using it either.” Therefore, foreclosure notices on facebook® do not appear to be a growing trend amongst Canadian lenders as mail or personal service still appears to be the primary method.

So, next time you panic about a possible late mortgage payment, don’t worry about your social network being the first to know – you will be. However, if you are hiding from your lender, think again. If your friends can find you, so can your lenders.

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