Power of Sale/Foreclosure/Bank Sale/Judicial Sale
A power of sale proceeding occurs when the lender has taken over the property due to a default on the loan/mortgage. This has also been referred to as a foreclosure or bank sale. The province you live in will dictate the rules the lender is required to follow.
Prior to the lender issuing the power of sale notice/foreclosure, they are usually required to send the borrower notice of the mortgage default in writing (depending upon the provisions of the mortgage). This will include a period of time the borrower has to remedy the default. Sometimes the lender will extend this time period if the borrower has commenced action to repay the mortgage.
If the default allows the lender to begin power of sale proceedings, there are certain requirements the lender must comply with:
- The notice of the power of sale cannot be issued until the mortgage has been in default for at least 15 days. And the sale of the property cannot be made until at least 35 days after the notice has been issued. In some instances, the mortgage may allow the lender to apply in court to begin power of sale proceedings without having to issue a notice, as long as the mortgage has been in default for at least 15 days.
Some provinces use the judicial sale process. This process is conducted under the authority and supervision of the courts and the lender must receive the okay from the court before they can sell the property. The process with the judicial sale can take a lot longer than the power of sale process, which can be a benefit to the homeowner. But can also be a lot more costly due to the court and legal fees.
If you ever find yourself in a power of sale/foreclosure or judicial sale, the best thing to do is to act quickly. The legal fees can be very expensive, eating away at a lot of your equity. Every time the lawyer works on the file, the legal fees increase.
I have helped several homeowners who have found themselves in the midst of a power of sale. I have private lenders who specialize in foreclosure/power of sale cases and together we have kept many, many homeowners in their homes. Credit scores generally don’t matter with these lenders. In just about every power of sale situation the borrower’s credit is severely damaged.
Depending upon where you are in the power of sale process, some lenders may require that the whole mortgage be re-paid in full, while others may just require that just the arrears amount plus legal fees be paid.
Whatever you do, do not bury your head in the sand, this will only make it worse. Even if the sheriff has shown up at your door to escort you out, it could still be possible to keep your home and avoid a power of sale. Please contact me with any questions/concerns you may have. And of course everything is kept strictly confidential.
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