Receiving a notice that your lender has initiated a power of sale can be a stressful and disheartening experience. However, it’s crucial to remember that there are options available to you to stop power of sale and keep your home. In this blog post, we’ll discuss some steps you can take if you find yourself in this situation.
Understanding Power of Sale
First, it’s important to understand what a power of sale is. This legal process, common in Ontario and other parts of Canada, allows a lender to sell a property without the lengthy court proceedings involved in a foreclosure. A power of sale is usually initiated after a homeowner defaults on their mortgage payments, although the specific timeline can vary depending on the terms of the mortgage agreement.
Step 1: Contact Your Lender
The first step to stop power of sale is to contact your lender. Open communication is key in this process. You may be able to negotiate a new payment plan, modify your loan terms, or apply for a mortgage forbearance. Remember, lenders typically prefer to avoid the power of sale process, as it can be costly and time-consuming for them as well.
Step 2: Consult with a Legal Professional
If you’re unable to negotiate a solution with your lender directly, the next step is to consult with a real estate attorney or a legal aid service. They can help you understand your legal rights and may be able to negotiate with your lender on your behalf. They can also help you explore options to stop power of sale, such as filing a motion in court or applying for a debt consolidation loan.
Step 3: Pay Off the Default Amount
Paying off the default amount is one of the most direct ways to stop power of sale. This amount typically includes missed mortgage payments, as well as any penalties or fees. However, we understand that this may not be a feasible option for everyone.
Step 4: Seek a New Mortgage
Another option to stop power of sale is to seek a new mortgage or refinancing from another lender. This could provide you with the necessary funds to pay off your current lender and avoid the power of sale process. However, keep in mind that this option depends on your creditworthiness and ability to secure a new loan.
Step 5: Sell Your Home
As a last resort, you might consider selling your home yourself before the lender does. While this option means you’ll have to move, it allows you to control the selling process and may prevent additional damage to your credit. Proceeds from the sale can then be used to repay the lender, effectively stopping the power of sale.
Remember, the goal is to stop power of sale before it reaches the point of no return – the eviction stage. While each of these steps may not be applicable or effective in every situation, they represent possible courses of action that you, as a homeowner, can take to protect your home and your financial future.
If you’re facing a power of sale, don’t lose hope. With prompt action, open communication with your lender, and professional advice, you can stop power of sale and navigate this challenging time successfully.