Ontario’s eviction moratorium is ending, and many homeowners are concerned about their finances.
Eviction enforcement was halted in mid-January as part of an emergency declaration by the province to fight the second wave of COVID-19. During this time a stay-at-home order was also issued, restricting all outside travel for non-essential workers.
With the number of new cases in decline, the stay-at-home order is being lifted in some regions in the GTA and across Ontario. Residents in those areas can now work and travel outside of their homes.
They can also be evicted.
The province of Ontario announced that where the stay-at-home orders would be lifted, they would also lift their eviction ban. An eviction moratorium had been in place since early January 2021.
Some homeowners have been getting by on a reduced income for over a year. Now they must try to keep up with their mortgage payments or risk losing their home as evictions resume. With many homeowners having already used a mortgage deferral, they are being expected to pick up the slack on their mortgage payments despite having fewer resources and assistance.
If you have been struggling to make ends meet before the eviction halt ended, then you need a strategy to maintain your mortgage payments going forward. Failure to do so increases the chances that you could lose your home through a power of sale or foreclosure.
A power of sale is a legal action taken by your lender to get their money back. A power of sale allows your lender to seize and sell your home to get the money back that was loaned to you.
With a power of sale, you will keep the remaining funds from the sale once your lender has been paid off and all their legal and real estate fees have been paid for.
While this is less than ideal, it is preferable to foreclosure.
During a foreclosure, your lender is also pursuing a legal remedy to get their money back once you have broken the terms of your mortgage agreement.
Both a foreclosure and a power of sale are triggered when you have broken the terms of your mortgage agreement. This could be many things from failure to pay property insurance or taxes, but the most common reason is missed payments.
The main difference between a power of sale and a foreclosure is what your lender can do with your property.
During a power of sale, your lender must sell your home as quickly as possible, they must return the remaining funds once all expenses have been covered.
With a foreclosure, the lender gets the title to your home. They are now the new homeowner and can choose to do with your home as they please.
If your lender decides to sell your home during a foreclosure, they are not entitled to return any extra money to you. A foreclosure leaves you with nothing.
If you know that you are going to miss a payment contact your lender immediately, you may be able to make the payment later or renegotiate your payment plan. There is no guarantee your lender will accept any proposal.
In some cases, if you have missed a payment you will need to pay a fine along with the money owed to get your mortgage back in good standing.
When a power of sale or foreclosure process is underway you must find a way to repay the debt remaining on your loan so your lender doesn’t seize your home.
There are a few ways you can do this:
You could get or a home-equity-line-of-credit or HELOC to pay off your lender. A HELOC allows you to draw funds as you need them from an account. The money drawn from a HELOC can be used for anything including stopping power of sale or foreclosure. You can draw as much money as is equal to the amount of equity you are using to secure your HELOC.
If you have enough equity in your home, you can secure a lump sum of cash with your home equity by getting a second mortgage.
Another option is mortgage refinancing. Mortgage refinancing is when you take out a new mortgage that replaces the old one, paying off your old lender and stopping any power of sale or foreclosure against you.
Throughout the COVID-19 pandemic, Ontario’s housing marketing has continuously grown in value. If you are at risk of a power of sale or foreclosure you can use this development to your advantage.
Toronto and the GTA housing priciness are rising as the region’s population grows.
Studies from Ryerson University found that Toronto is the fastest-growing city in North America. In January 2021, the Toronto Regional Real Estate Board reported the average price for a residential home in the region grew by over 10 percent from the same time the year before. If you own a home in Toronto or the GTA, your home has likely increased in value, providing more equity you could use to stop a power of sale or foreclosure. You can use the Automatic Private Mortgage Pre-Approval Tool to determine if you have enough equity to secure financial assistance.
While banks and most financial institutions have strict requirements to approve loans, at Mortgage Broker Store you can receive financial assistance to stop any power of sale or foreclosure regardless of your credit score or income.
If you own a home in southern Ontario with enough equity, then they can work with you. Contact their team to speak directly with mortgage brokers in the GTA and receive a free quote with advice.
When it comes to protecting your home, you need to be prepared. Get the information you need to explore your options and safeguard your home from any power of sale or foreclosure in the future.
jonathan February 25th, 2021