Ontario Mortgage Agent Practice Exam

The process of foreclosure allows a lender to reclaim ownership of a property when a borrower defaults on their mortgage payments. Once the foreclosure process is complete and the property is sold at a foreclosure sale, the proceeds from that sale are used to pay off any remaining debt associated with the mortgage. If the sale clears the outstanding debt, the lender can then gain title to the property. Essentially, this means the lender takes ownership of the property after the legal proceedings and sale process are concluded. It is crucial because this automatic transfer of ownership upon a successful sale allows the lender to recover their investment and mitigate losses incurred from the defaulting borrower. The other options do not relate to the foreclosure process in a way that triggers the lender's right to obtain title. For instance, title cannot be acquired before a loan is approved, the appreciation of property value does not facilitate title transfer after a default, and compensation policies would not directly relate to a lender gaining title following a foreclosure procedure.