Homeowners facing repossession are usually at the end of a power of sale or foreclosure. Understanding how a situation can evolve to the point where you’ll be evicted and your house repossessed is important. There are usually a few telltale signs that you’re in financial trouble. Understanding the process means knowing the right steps to take and how to avoid the financial issues that lead to it.
Mortgage Broker Store can help stop the process so you can save your home. If you have a certain amount of equity built up, you can get a private loan to stop a repossession/foreclosure.
First, it’s important to understand that most homeowners in Ontario keep their mortgages up to date and make payments on time. When you break one or more terms of the mortgage agreement, this is called “defaulting on the mortgage”. Missing one or more mortgage payments can cause a default. A breach of a covenant can also cause a default. The reasons include not insuring the property or paying the taxes. Damaging the property on purpose or using it for illegal activities can also cause a breach of a covenant. Lenders have the authority, by virtue of the Ontario Mortgages Act, to handle a default.
Most of these lenders will use the power of sale process. It’s a way to try to encourage borrowers to get their mortgages back on track and into good standing so that they can avoid repossessing the property.
The other option is foreclosure. However, it’s not as commonly used as a power of sale because it takes longer and requires more court involvement. The terms foreclosure and repossession are used interchangeably.
Several red flags can indicate you might be facing a repossession or foreclosure.
You should pay attention to a few red flags before this repossession/foreclosure process starts. For example, if you have no disposable income and you’re struggling to afford the necessities, it might be time to review your budget.
If you’re facing a default or repossession, there are options to delay the process, including filing a Statement of Defense. As the name implies, this is a part of the process where the homeowner gets to respond to the lender’s allegations and/or point out errors in the agreement.
Defending the mortgage action should only ever be used on the recommendation of a lawyer, and only if the lender has made serious errors in their legal action.
Some of the other ways that you can prevent a lender from taking your property include:
You can also allow a buyer to purchase the property at a reasonable price using a real estate agent.
Both lenders and borrowers want to avoid repossession and/or power of sale. One of the best ways to do that is to work and negotiate with the bank or credit union. It is best to contact them when you first start to have financial difficulties.
It’s important to remember here that the Statement of Claim details the amount the lender needs and the deadline for payment. Usually, that’s the mortgage amount in arrears plus any fees.
Some lenders don’t want to negotiate, but they need their money. If you find yourself in the middle of a foreclosure or power of sale process, the chances are you are a high-risk lender.
Your best bet when you’re in that situation is to turn to a private lender. They can provide you with the money to stop a foreclosure if you have some equity in the property.
A private lender can replace an existing second mortgage with a new product.
Private lenders might refuse a second mortgage if the value of the money involved is too high. If that’s the case, you can sell the property or allow it to be repossessed.
If you’re facing a repossession, foreclosure, or even a power of sale, contact us for a free consultation. The team of experts there can stop the process that can have you evicted from your home. One of our priorities is loans that don’t meet traditional lending institution requirements. Unlike many competitors, we are both a direct private mortgage lender and a mortgage brokerage. Our team includes private lenders, brokers, and real estate agents. Let us help you prepare for and get a product that meets your requirements.
Email ron@powerofsalesontario.ca or call 416-499-2122.
jonathan August 13th, 2024
