About Power of Sales
People who fail to pay their mortgage will eventually be faced with either a Power of Sale or Foreclosure action. These are legal remedies that allow a lender to recover their money and in both cases, the borrower will lose their home. In a power of sale, the borrower will receive a document called a “notice of default” 15 days after failing to make mortgage payments. If the borrower does not pay to bring the mortgage back into good standing a “statement of claim” is issued. This document allows the lender to sell the property to recoup the mortgage amount. After the lender is paid out, and all fees are paid the rest of the money from the sale of the house goes to the homeowner. Unfortunately due to the high cost of lawyer, real estate agent, and other fees the homeowner will be left with nothing in many cases.
A foreclosure is a less common remedy in Ontario due to the length and cost of the legal process. A power of sale takes a few months while foreclosure takes over a year. The biggest difference with foreclosure is that the lender can take title to the property and own it outright. Common reasons why a lender would use foreclosure are that there is a lot of equity left in the property, or the lender wishes to own the property for their own uses.
How to Stop Power of Sales & Foreclosures
Stopping Power of sale and stopping foreclosure are complex legal processes and the best course of action depends on many factors. Most people don’t understand the consequences of all the possible actions and sometimes worsen their situation. Our team consists of some of the best experts when it comes to stopping power of sales and foreclosures. We have in depth knowledge of all the legal documents relevant to these actions as well as years of experience. We never charge for initial consultation, we are more than happy to speak with you to discuss different possible courses of action. Every person has different needs and we help to decide which of the possible outcomes is in your best interest.
There are many different remedies we can take to resolve the situation
1. Place a new mortgage to replace the old mortgage
This is a simple solution that allows the homeowner to stop any power of sale or foreclosure actions and start fresh. Our team can look at the equity in your home & other factors to see if you qualify for a new mortgage. Often times the terms of the new mortgage will be different and the interests rates a little higher, but the homeowner will get to stay in their home.
2. Have the homeowner sell the property themselves
One common solution we have for people who are in arrears of their mortgage is to sell the property. In many cases the homeowner doesn’t have the money to pay the mortgage fees and cannot borrow any more against the property. In this case the homeowner can avoid all the the lenders miscellaneous fees by selling the property themselves. By doing this the homeowner will lose the home, but will come out with many thousands of dollar more than if the lender sold the property. This additional money can then be put towards rent or a more affordable property.
If you or someone you know is faced with a power of sale or foreclosure, it is important to act quickly. As these actions progress, it becomes more expenses to stop them. Give us a call at 905-614-2571 and we can go over your options free of charge.