February 28
0 comments
The power of sale process in Ontario is a legal procedure that allows lenders to sell a property without going through the court system. The process is governed by the Mortgages Act and the Real Estate and Business Brokers Act. If a borrower defaults on their mortgage payments, the lender can initiate the power of sale process to recover the outstanding debt.
The process typically begins with the lender sending a Notice of Sale to the borrower, which outlines the details of the sale and gives the borrower a chance to pay off the mortgage arrears and any other outstanding costs. The notice must also be registered on the property's title and sent to any other parties with an interest in the property, such as other mortgage lenders or lien holders.
After the Notice of Sale has been sent, there is typically a waiting period of at least 35 days before the lender can proceed with the sale of the property. During this time, the borrower has the right to redeem their mortgage by paying off the outstanding debt and costs.
If the borrower is unable to redeem their mortgage during the waiting period, the lender can then sell the property through a real estate agent or by public auction. The proceeds from the sale are used to pay off the outstanding debt, including the mortgage arrears, interest, and any other costs associated with the power of sale process. The lender must provide a statement of account to the borrower outlining the costs incurred during the power of sale process.
If the sale of the property generates more money than is required to pay off the outstanding debt and costs, the surplus funds are returned to the borrower. However, if there are other parties with an interest in the property, such as other mortgage lenders or lien holders, they may be entitled to a share of the surplus funds.
On the other hand, if the sale of the property through power of sale does not generate enough money to cover the outstanding debt and costs, the lender may be able to pursue the borrower for the remaining balance. This is known as a deficiency judgment. However, in Ontario, the lender must obtain a court order to pursue a deficiency judgment. The court will then determine if the borrower is liable for the deficiency and the amount of the deficiency owed.
As a homeowner, your property is likely one of your most significant investments. However, recent discussions around potential housing policy changes by our federal government, under the banner of “Fair Housing,” could alter the landscape of the Canadian housing market in ways that directly impact you. These changes are being driven by a push to
Read MorePersonalize Your Blog Reading ExperienceChoose your preferred content version The Essentials Comprehensive Advanced Introduction:The landscape of Canadian homeownership has been experiencing tectonic shifts, primarily influenced by critical decisions from the Bank of Canada (BoC) and regulatory authorities. Intended to steady economic scales and rein in rampant inflation, these choices have had complex repercussions, particularly felt
Read MorePersonalize Your Blog Reading ExperienceChoose your preferred content version The Essentials Comprehensive Advanced IntroductionIn the intricate ballet of economic strategies, interest rates have traditionally taken center stage, captivating audiences with their clear, sweeping impacts. But there’s a subtle performer moving in the shadows, one that the Bank of Canada is increasingly turning to in these
Read More