Stopping Power of Sale

Understanding Power of Sale

A power of sale is a legal procedure that allows lenders to sell a property when borrowers default on their mortgage payments. This clause is typically written into most mortgages and gives the mortgage lender the right to sell the property if the borrowers fall behind on mortgage payments. It’s a common misconception that the lender wants to sell the property, but in reality, lenders would rather have the borrower keep their home and continue making payments. The power of sale process is initiated when a borrower fails to make their mortgage payments for a certain period of time.

The Power of Sale Process

The power of sale must follow a strict procedure in order to complete the full power of sale process. It begins with the lender contacting the borrower upon default. If the borrower continues to be in default, the lender can deliver a Notice of Sale. This notice should be mailed to every party who is considered a mortgagor and a mortgagee in the agreement. The Notice of Sale is the first formal step in the power of sale process and it indicates the lender’s intention to sell the property if the default is not rectified. The borrower then has a redemption period during which they can pay off the arrears and stop the power of sale process.

It’s important to note that the lender may demand that the mortgage be repaid in full after the redemption period has expired. After that, the lender’s law firm will also be able to issue the writ of possession. Essentially, they can appoint a sheriff to evict you from your home using this legal document. This is a serious consequence of the power of sale process, and it underscores the importance of taking action early to stop the power of sale.

Stopping Power of Sale

The best way for a borrower to stop power of sale is to bring their mortgage out of default. Paying off the borrower’s arrears plus any legal fees will stop a power of sale. Alternatively, they can also pay the mortgage off in full, along with the legal fees. It’s important to note that stopping a power of sale can be a complex process, and it’s often beneficial to seek professional advice to ensure the right steps are taken.

Possible Remedies

There are several remedies available to borrowers facing a power of sale. These include paying off the mortgage arrears, refinancing the mortgage, selling the property, or filing a consumer proposal or bankruptcy. Each of these options has its own advantages and disadvantages, and the best choice will depend on your individual circumstances.

Short Term Refinancing

Short term refinancing is another option for stopping a power of sale. This involves taking out a new mortgage to pay off the existing one. The new mortgage will have a shorter term, typically six months to one year, and may have a higher interest rate. However, it can provide with the funds needed to pay off mortgage arrears and stop the power of sale process. TheBroker.ca Ltd. can provide borrowers with the necessary information and resources to understand short term refinancing, and help them make informed decisions about their mortgage.

Conclusion

TheBroker.ca Ltd. can provide guidance on navigating the power of sale process. We can help you understand your rights and responsibilities during this process and can assist you in exploring various options to stop the power of sale, and also help you understand the implications of the power of sale process, including the potential impact on your credit score and future borrowing ability.

Understanding the power of sale process and how to stop it is crucial when dealing with mortgage defaults. Reach out to TheBroker.ca Ltd. through our website, or by calling (519) 252-9665 for personalized guidance and support in navigating the power of sale process.

Please note that this article is for informational purposes only and does not constitute legal and financial advice. Always consult with a professional before making any financial decisions.

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