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Stop Power of Sale

Process of Stop Power of Sale

One of the scariest and most upsetting things you can go through as a homeowner is to get a Notice of Sale from your lender. This can happen if you have been unable to keep up with your mortgage payments. At this point, the clock will be running and if you cannot bring your mortgage back into good standing before the deadline, you run the risk of losing your home.

The good news is that even if your mortgage is in arrears, it is possible to Stop a Power of Sale. In fact, most lenders want you to Stop the power of sale so they don’t have to go through the lengthy process of eviction and selling your home.

In this article, we will explain some of the basic terms to help you understand the process to stop a Power of Sale that could ultimately help you save your home.

What is Power of Sale?

Power of Sale is a recourse that a lender can take when a homeowner or mortgage borrower is not keeping up with their payments. It is a way for the lender to recoup their money. Initially, a legal notice is sent to the borrower in hopes of getting them to pay what they owe. If the homeowner can’t or won’t pay, the lender then has the option of evicting the homeowner and selling their home.

How does a Power of Sale work?

For a Power of Sale to be valid and legal, a very strict series of steps must be followed. When the homeowner has failed to make their payments, the lender can start the process by contacting the homeowner and letting them know that their mortgage is in default. This gives them a chance to pay what they owe – after all, most lenders would prefer to let the homeowner pay them rather than go through the rigorous process of a Power of Sale.

If the homeowner is contacted and they still do not bring their mortgage back into good standing, the lender can take the next step in the process by issuing a Notice of Sale. This is a legal document that must be sent by registered mail. The earliest that this can be done is 15 days after the default. Once the homeowner receives the Notice of Sale, the lender must wait under 35-40 days (depending on the property and who lives there) before they can take any further action.

Understanding the Statement of Claim, Writ of Possession and Sheriff Eviction

If the homeowner fails to make their payments during the redemption period, the lender may issue a Statement of Claim. This allows the lender to take possession of the property.

The next step in the process is an Application to Take Possession of the Property. In this step, if the homeowner has still not paid, the Court can issue a Writ of Possession which allows the local Sheriff to evict the borrower and anyone else living on the property if they have not vacated within a specified time frame.

The final step in a Power of Sale is selling the property. Unlike with a foreclosure, the title of the property never actually goes to the lender, but they are given the authority to sell the property. When the property is sold, it must be sold at a fair market value. If it is sold at a deep discount, the borrower has the right to sue the lender.

The proceeds from the sale go first to the lender to pay what they are owed plus any legal and admin fees. If there is any money left over after that, it goes to other creditors and those who may have liens against the property. Finally, if there is any money left over, it goes to the borrower. (Typically there is very little money left at this point – if any.)

What is the difference between Power of Sale and Foreclosure?

Many people think of Power of Sale and Foreclosure as basically the same thing, when in fact they are actually two different legal procedures. People often have the perception that those in this situation have brought it on themselves, when in reality there are usually circumstances that are out of their control such as an unexpected job loss or expenses associated with an illness or some other emergency. In other words, a Power of Sale can add even more trauma to those who are most likely facing very stressful situations.

Since these words are sometimes used interchangeably (mistakenly), it is worth spending some time reviewing the differences. Although both Power of Sale and Foreclosure are legal processes where the borrower is evicted from their home and the home is sold, they are not quite the same thing.

In a Foreclosure, the title of the property is actually transferred to the lender. This does not happen during a Power of Sale.

This is an important distinction because when a home is sold under the Power of Sale process, any leftover profits after the lender and other creditors have been paid, go to the borrower. In the foreclosure process, the borrower is left with nothing.

How to stop a Power of Sale?

If you are a homeowner who is facing a Power of Sale, it can be a very scary experience. The last thing that a homeowner wants is to lose their home. Even when your mortgage is behind, you may have financing options to bring your mortgage current and regain good standing – either with the current lender or a new one. You don’t want to lose your home, and your lender doesn’t usually want to go through the Power of Sale process – it’s expensive and time consuming. We can help you find a way to work with your lender to keep you in your home. Fortunately, there are a few different things you can do if you find yourself facing this situation.

Bring your mortgage back into good standing

Refinance your mortgage

Get a second mortgage

Get a Stop Power of Sale loan

Sell your home

Contact Us Today

Bring your mortgage back into good standing

If you are able, the quickest and easiest way to stop a Power of Sale is to pay the lender what you owe. It is most likely that your lender does not really want the hassle of going through a Power of Sale. If you can’t pay everything you owe up front, then you may be able to work out a payment plan with the lender. Just be sure to get everything in writing if you decide to go this route.

Refinance your mortgage

Another option to stop the Power of Sale may be to refinance your mortgage. Refinancing your mortgage simply means that you are breaking the problematic mortgage in order to get a new one. The new mortgage pays off your old mortgage and you then make your mortgage payments to the new lender.

Keep in mind, if you do choose to refinance your mortgage, you will likely have to pay a financial penalty for breaking the old one. If however, the alternative is losing your home, such a penalty will likely be a small price to pay.

Get a second mortgage

Depending on how much you need to pay to get your mortgage out of arrears and how much equity you have in your home, you may be able to stop a Power of Sale by getting a second mortgage. A second mortgage is a loan that is secured using the equity in your home.

Once you have brought your mortgage back into good standing, you will then have two mortgages – the one with the original lender, and your second mortgage (the loan you used to pay your original lender to stop the Power of Sale).

This can be a tricky route to go however, as the result will be that you’ll have more debt to pay back and you may still be in danger of losing your home if you are unable to make the payments.

Get a Stop Power of Sale loan

Another option for stopping a Power of Sale is to get a Stop Power of Sale loan. This is a personal loan that – while unsecured (not tied to your home equity) – is still based on how much home equity you have.

If you do need to take out a loan in order to stop a Power of Sale, this is often one of the best options. You should however review all your options with your mortgage broker before making your final decision.

Sell your home

Finally, if you cannot obtain the funds that you need to pay off your lender through any of the above mortgage solutions, there is the option to sell your home before the lender does.

While this may not seem like an ideal solution, this option at least gives you a little more control over how much your home is sold for and you will likely be in a better financial position selling your home yourself versus allowing the lender to do it.

You will still have to pay the lender what you owe from the proceeds of the sale, but you are likely to be better off than if you allow the Power of Sale to go through.

While you still have title to the property, it is a prudent idea to take immediate actions toward retaining your home.

How do I get the best interest rate on a loan to stop a Power of Sale?

Whether you are stopping a Power of Sale through refinancing, a second mortgage or a Stop Power of Sale loan, your interest rate is going to depend somewhat on your credit. Regardless however, your mortgage broker will be able to compare rates on your behalf in order to help you get the best rate.

Typically, you will also get better rates with secured loans than unsecured loans so it is likely that you will do better with a mortgage refinance or a second mortgage than an unsecured loan. If you are unable to make payments on a secured loan, you could be at risk of losing your home again – so these options are not for everyone.

You are also likely to get a better rate with a mortgage refinance than a second mortgage (since lenders consider a second mortgage to be a riskier investment.) Getting a mortgage refinance requires you to pay off your current home loan. You also need to consider how much of a financial penalty you may incur from refinancing. If the penalty is too large, it might be a better deal for you to go with a second mortgage that has a higher interest rate.

Generally speaking, if you are considering a mortgage refinance in order to Stop a Power of Sale, the closer you are to your mortgage renewal date, the lower your financial penalty will be. So if you are close to your renewal date, a mortgage refinance may be the better option. Whereas, if you are further away from your renewal date, a second mortgage or even a stop Power of Sale loan may be the better option.

When you consult with your mortgage broker, he will run the necessary calculations to determine the best and least costly solutions for you.

What is the best solution to stop a Power of Sale?

The best solution to stop a Power of Sale is going to depend on the individual homeowner and their unique circumstances. If you have the funds to stop the Power of Sale yourself, paying the past-due arrears and any required fees may be your best option.

If you need to borrow, it is best to consult your mortgage broker as to whether refinancing, a second mortgage or a Stop Power of Sale loan makes the most sense for you.

Is it too late to stop a Power of Sale?

Many homeowners think that once they have been evicted from their home it is too late to stop a Power of Sale. But this is not the case.

While it is best to stop a Power of Sale as soon as possible, you can still stop it right up until the closing date of the sale of the property. Even if the property has been sold firm (and not closed), it is still possible to redeem your home. Obviously however, at this point, time is of the essence and you may have to make the payment in Court to ensure that any legal proceedings toward selling your home are eliminated.

What should I do if I am facing a Power of Sale?

If your lender has informed you that your mortgage is in arrears, has issued a Notice of Sale, or even if they have already evicted you from your home, there is no time to waste. You need to contact your mortgage broker as soon as possible. Tell them you are facing a Power of Sale and that you need to review your options.

Depending on where you are in the legal process, the amount of equity you have in your home, your mortgage renewal date, and a number of other factors, your mortgage broker will help you come up with a solution that best suits your needs.

Can I still stop a Power of Sale if I have bad credit?

In most cases, in order to stop a Power of Sale, you will need to get a loan of some sort. Fortunately, mortgage brokers will work with a variety of lenders who specialize in helping those with poor credit.

Getting a loan with a bad credit lender is typically more expensive in terms of interest payments than getting a loan with a preferred lender. However, if the alternative is your current lender taking and selling your home, then it may be well worth it.

Your mortgage broker will work very diligently to ensure that you get the best interest rate on your loan. Using a network of trusted lending sources, mortgage brokers are able to compare rates on your behalf to help ensure that you get a great deal.

Advantages of working with a mortgage broker to stop a Power of Sale

While it is not strictly necessary that you work with a mortgage broker to stop a Power of Sale, it is highly advised that you speak with one of these professionals rather than trying to do it on your own – especially if you need a loan in order to pay back your lender.

Contact us today to Stop Power of Sale

If you are facing a Power of Sale, it may feel overwhelming and it may feel like you are going to lose your home. But that doesn’t have to be the case. Our brokers are some of the premier experts in the province at Stop Power of Sale and we have helped many clients keep their homes.

Contact us today to speak with one of our brokers about what you can do in order to stop a Power of Sale.

If you are looking to get a Stop Power of Sale in canada, we can help! Contact us today to learn more.

Stop Power of Sale FAQ's

Everyone has a unique situation, and there isn’t one answer that will work for every scenario. If you are struggling financially, an appointment with one of our mortgage brokers could be instrumental toward saving your home from a Power of Sale.

Not necessarily – losing your job does not mean that you will lose your home. Speaking with a lending professional before your mortgage is in default is a wise idea. Call today and we will discuss several options that could help you stay in your home.

Your credit score is based on how often you make timely payments to your creditors and a number of other factors. Getting another loan could impact your credit score. When you apply for financing, we will look at your credit report and determine your eligibility for a new home loan. A mortgage loan that prevents a Power of Sale should be helpful for your credit score.

A statement of claim is a legal document that a lender files in a superior court of justice to initiate a lawsuit. If the court rules in a mortgage lender’s favour, it allows them to take possession of the property.

You may negotiate a Power of Sale, but you should only do so after receiving professional advice from a real estate lawyer. Most lenders would prefer that you bring your mortgage back into good standing than go through the trouble of selling it. You should, however obtain legal advice to make sure your rights are protected.

Yes. If your mortgage is in default, your lender can issue a statement of claim, and the courts will award them the authority to evict you from your home and sell it. If you are facing a Power of Sale, it is critical that you seek professional advice as soon as possible.

Yes. As long as you still own your home – right up until the closing day on the sale – it is possible to stop a Power of Sale.

Yes. Experienced mortgage brokers can offer you a range of options to help you get out of a Power of Sale such as arranging a new private mortgage to buy out the existing mortgage under default.

Yes. If your mortgage is in default, your lender can issue a statement of claim, and the courts will award them the authority to evict you from your home and sell it. If you are facing a Power of Sale, it is critical that you seek professional advice as soon as possible.

Although the terms may sometimes be used interchangeably, a foreclosure and a Power of Sale are not the same things. In a foreclosure, the title for a property is transferred to the lender and the homeowner will not receive any money from the sale.

In a Power of Sale, the lender is given the authority to sell the property but does not get the title. Proceeds from the sale are used to satisfy the amount that is owed to the lender and other outstanding fees. Thereafter, any additional proceeds are given to the borrower.