Definition
A mortgage default occurs when the borrower fails to meet their contractual obligations to the lender.
**Types of default**: 1. **Payment default**: late mortgage payments (generally 3+ consecutive payments) 2. **Technical default**: violation of a contract clause (unauthorized subletting, insurance default, unauthorized modification) 3. **Maintainability default**: serious dilapidation of the property reducing its value 4. **Declaration default**: fraud discovered at application
**Process in Quebec**: 1. Initial delays → lender communication, late fees 2. 90+ days late → formal default notice 3. Publication of notice of exercise of hypothecary rights (20 days) 4. Cure period: borrower can remedy (pay arrears) 5. Remedies: taking in payment or forced sale
**Credit impact**: - 30-60-90 day late payment: progressive negative points - Declared default + legal action: major damage (100+ points), remains 7 years
**Prevention**: - Payment protection (job loss/disability insurance) - Proactive communication with the lender at first signs of difficulty - Some lenders offer temporary payment deferrals (COVID-19: bank moratoria) - Mortgage broker can help with preventive refinancing before default