Power of Sale in Ontario
When a borrower does not make the agreed upon mortgage payments, the lender has the right to sell the property to reclaim money owed. This process is called Power of Sale. It is the most common remedy used by lenders in Ontario who are looking to recoup their investment. This process was created in Ontario to be an alternative to the foreclosure process. The entire power of sale process takes around 6 months to complete. In a power of sale, any profit from the sale of the home after all secured debts and fees are paid must go to the former homeowner. Letting the power of sale process complete itself is usually the worst option for the homeowner, as this typically results in massive fees that reduce any profit from the sale. The homeowner has various options for dealing with the power of sale depending on when the power of sale started, the equity in property, the value of the property, and the location of the property.
How To Stop a Power of Sale in Ontario
Every method of stopping a power of sale involves paying the lender specific amounts of cash. The lender is legally permitted to request different amounts depending on if the mortgage term is expired and when the legal process was started. Once the initial Notice of Sale document is sent, if the mortgage term is not expired, the lender must accept payment of all arrears and fees. The value of arrears and fees is typically much lower than the full mortgage amount, and once paid the borrower may resume the mortgage normally. The payment of arrears and fees will only be accepted 35 days (40 days if the property is occupied by a married couple) after the Notice of Sale is sent. Once this period (referred to as the Redemption Period) is over, the lender can request repayment of the entire mortgage and can refuse to continue the mortgage with the borrower. Typically the borrower does not have the cash on hand. This is where Flip iTT can HELP Stop a Power of Sale.
Sell the property before the lender takes it
You can still try to sell the property before the lender takes the property. While it can be difficult to part with your home, selling the property may be the best option since it allows the you to sidestep many of the power of sale fees. If a lender sells a property under power of sale, they can charge in excess of $30,000 in fees and this reduces the amount the former homeowner would get from the sale.
How Flip iTT Canada Can Help
Finding a buyer for your home can be a lengthy process and time is not on your side in power of sale situation. Our team specializes in buying homes for CASH for people in power of sale. Our team can speak with you to understand where you are in the legal process.
If you would like a CASH offer for your home, you can call 416-835-7800 or email [email protected] and we will get back to you the same day.