The notice of sale is sent to a borrower who has defaulted on their mortgage. The details about the mortgage default are included, such as the total amount due and any other charges. It’s part of the power of sale process whereby a borrower can lose the property and get evicted unless they take specific steps.
Contact the team at Mortgage Broker Store for expert support and guidance if you are dealing with a power of sale.
These legal documents are sent as a letter to a borrower who defaulted on their mortgage. Everyone who has an interest in the home or property gets this document. In other words, all the mortgage holders and lenders get a notice of sale.
This is the first step in a lender starting the power of sale process. This document gets sent at least 15 days after the mortgage has been defaulted on. Lawyers generally sub-search the title and send these notice of sale documents through registered mail.
The notice of sale is the first step when a lender starts a power of sale process. The power of sale can allow a lender to sell a home to recover unpaid amounts and costs. The power of sale is the more commonly used method to handle mortgage defaults. The other tool is the foreclosure.
One of the implications for a derelict homeowner is eviction after a statement of claim is issued. Borrowers also need to remember they can be held accountable for outstanding debts if the house’s sale price doesn’t cover the lender’s costs. Under that circumstance, the lender needs to file a Writ of Execution.
Under a power of sale, the in default homeowner gets the money left over once all of the other lender’s costs have been paid.
The process that winds up with the borrower getting a notice of sale begins when they default on their mortgage payments. The default could be due to several reasons, such as not maintaining the property or paying property taxes. It can also be because they’ve left the property in disrepair.
It’s essential to remember that there’s a waiting period after a notice of sale gets delivered during what’s called the redemption period. The borrower can pay off the entire mortgage amount, including all the costs the lender has incurred. They can also bring the mortgage up to good standing.
The most significant consequence at the end of a notice of sale is the homeowner losing the property. The homeowner can also be accountable for the extra money if the house sells for less than the outstanding mortgage legal fees and other costs.
Getting involved in this process can damage your credit score. Remember, a power of sale becomes a matter of public record when a lender begins proceedings. It can lower a borrower’s credit score and make them look like a high risk to other lenders.
Equifax reports that public records like this count for 10% of a credit score.
When a homeowner gets a power of sale, it’s in their best interest to get the right advice on how to move forward. That can include seeking the right legal advice.
Complex financial situations
These situations are at the top of the list. They may include liens on the property and disputes about the amount owed on any mortgage. Any property title issues and multiple mortgages can make a situation complicated.
The right legal professional is the person to contact in these circumstances.
Disputes with the lender
Some borrowers want to dispute the reason for the default with the lender. There’s also the possibility of mistakes in the amount claimed and different viewpoints about the mortgage terms. It’s best to get legal advice here.
Unclear terms or unfair practices
Unexpected fees are another situation in which you should get legal advice. Sometimes, communication about the terms of the sale can break down, and the notice of sale can contain mistakes.
These are a few of the other situations where legal advice is necessary. There are options for homeowners involved in this process.
A private mortgage or loan can provide a borrower with the money to stop a power of sale process at the notice of sale stage. These loans are different than more traditional mortgages. They focus on the equity, or the amount of the property paid off. That’s different than a conventional bank loan that leans on credit scores and employment history.
A private mortgage has a streamlined process, but borrowers need to remember the interest rates are higher and only the interest gets paid down. However, these private mortgages are flexible and can be made to suit different situations. They are the right choice for people with bad credit and those looking for money for unexpected home repairs.
Mortgage Broker Store can help you with competitive private mortgage or loan rates. 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@mortgagebrokerstore.com or call 416-499-2122.
jonathan August 1st, 2024
