There are very few people that will explain either the foreclosure or power of sale process to a homeowner, but we feel it’s important to inform everyone. Generally speaking, real estate lawyers or a very specialized mortgage brokers, are the only people who are qualified to do so. We have the experience to analyze all documentation to help you make an informed decision.
These documents could include:
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Notice of Sale Under Mortgage
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Statement of Claim
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Writ of Possession
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Eviction Notice
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Judgements
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Court Orders
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Executions
Since most of these documents are time-sensitive, so it’s vital to take immediate action.
Foreclosure is an unfortunate event and it can happen to anyone, even you. The good news is, if you are still in your home but you’re already in foreclosure, you may be able to stop it. But, first you need to understand it.
Understanding Foreclosure
Foreclosure enables your lender to repossess your home to regain the money they lent you to obtain your mortgage. You don’t want to lose control over the property sale, but even that, sometime is unpreventable because life happens. However, the sooner you take action, the sooner you can regain control over the situation.
Most Common Reasons For Pending Foreclosure
Some homeowners’ wilfully commit mortgage fraud. For instance if you don’t have intent to make your monthly mortgage payments, then this is considered to be mortgage fraud. In other circumstances, foreclosure can occur due to unexpected life events, such as:
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Loss of employment, or loss of a second income
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Unexpected illness or injury
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A family death
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Divorce or family issues
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Debts that have piled up over time
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Unable to manage and pay higher interest rates
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Unexpected major home maintenance and repair expenses
Foreclosure is not the only issue that’s affecting many Ontario homebuyers’ today, Power Sale is another growing concern.
Understanding Power of Sale
The Power of Sale process differs from the Foreclosure process. In foreclosure your lender will sue you to recover their losses, but with Power of Sale process it usually starts when you get your home loan and buy your home. Basically when you make your purchase, it comes with a “deed of trust.” This deed is then transferred to a “Trustee.” This gives the trustee power to sell your property if you can’t or don’t meet your loan obligations for whatever reason. As a result, the trustee with recover the lender’s losses, acting in lieu of the court, when your lender notifies them of your payment default.
Many homeowners’ in Ontario deal with the frightening prospect of Power of Sale. This is especially true if they are a homeowner with a low credit score. If you are one of these homeowners, then this may leave your mortgage broker with quite a challenge when it comes to finding you a sub-prime lender to replace your current lender. This could leave you feeling like you have no other choice than to sell your home. This is Power of Sale.
However, Power of Sale isn’t necessary. There are programs available that enable you to pay of your current lender without being forced to sell.
How-to Avoid, Delay or Stop Foreclosure or Power of Sale?
The biggest issue facing Canadians is that most of the population are not aware of their rights when it comes to dealing with matters of foreclosure or power of sale. Never ignore these types of problems because there are a few ways you can avoid, delay and even stop it from happening, but you need to act quickly. Here are a few things you can do:
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Be proactive, notify your lender if you’re at risk for default
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Request extra time to make your payments or make affordable payment arrangements (also known as forbearance)
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Ask for modifications to your existing mortgage if it’s adjustable, such as changing your interest rate or amortization period to make it more manageable or reduce your monthly payments
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Check in with your mortgage broker to see if your default insurance can provide temporary protection
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Gather all legal documents related to the foreclosure or power of sale
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Find out what outcome the lender is hoping for, recovering their losses or taking your home
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Notify your lender if you are making an attempt to gather the money that is owed
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Seek mortgage and/or legal advice from a mortgage broker or lawyer
In some cases, using these tips may help to avoid, delay or stop foreclosure or power of sale before it happens. If you’ve found yourself in this position, contact your mortgage broker at AKAL Mortgages to discuss your situation. We can advise you on the best route to take for all options available to you.
When we say Yes! We stand behind our promise.
