Stop your lender from foreclosing on you. Axess Law real estate lawyers could save your home from mortgage defaults and other contract breaches with mortgage refinancing. We close the sale if you’re forced to list.
No one buys a home or investment property expecting to be foreclosed. Life happens.
Mortgage defaults are serious for your lender and credit rating. Yet many contractual disputes can be amicably resolved. Whether you:
- defaulted unwittingly on property taxes
- remortgaged your home without permission
- underinsured a home or investment
- hurt its saleability by letting your home fall into serious disrepair
- or listed your home or property without telling your lender
Axess Law has cheap lawyers (Toronto and area) who can work with you to refinance your property. Starting over could repair your damaged credit score.
How Does Foreclosure Work in Canada?
Step 1: Lender Makes Demands
Home owners or property investors seriously behind on mortgage payments or who have breached a mortgage contract may get repeat phone calls or a demand letter from their bank or credit union.
If you've been asked to pay the mortgage balance in full, don't panic just yet. Contact your lender and ask for more time to pay or ways to remedy your contract that could keep you in your home or investment. We make referrals if you need a lawyer near you to write to your lender.
Step 2: Notice of Sale or Foreclosure Claim is Sent
When efforts to patch up your relationship with your lender break down, you may get a notice of sale or statement of foreclosure claim. Axess Law’s trusted legal partners can intervene by writing or calling your lawyer. Outstanding balances and legal or other fees may be required.
Asking a bank, credit union or private lender to take over your mortgage is one option. Or you could request consent to sell your property yourself and pay out the mortgage.
Step 3: Power of Sale
Somewhere in your mortgage contract fine print is the term 'power of sale'. It’s just one legal remedy your lender can use to recover their investment. Your lender can literally have you evicted by a sheriff for non-payment (without going to court) and list your property for sale.
By that point, your home or investment property often doesn't have much market value. You risk losing everything by letting a lender use power of sale. Besides the outstanding mortgage, your lender will deduct legal fees, interest and penalties, leaving you with little, if any, return.
You lose the down payment and any money you spent on upgrades, let alone the peaceful enjoyment of your family home or future rental income. If you are facing power of sale, Axess Law's licensed real estate lawyers have referrals for what to do next.
Step 4: Judicial Foreclosure
You may have successfully prevented power of sale only to be faced with an application for judicial foreclosure. If your situation hasn't improved, your mortgage lender may file a legal claim in Ontario court.
Unless you can satisfy the court's request for payment in the next 30 days, the court can grant a lender a judgment against you. Your home goes up for sale again, typically by auction. Your eviction by a sheriff will be observed by the whole block or so it will seem.
Bad news: if the lender gets less for your home than you owe, you might be hit with a deficiency judgment for the balance. Or they may just walk away, leaving you with a bad credit score.
Fix Your Credit Report
The worst happens and you are foreclosed upon or declare bankruptcy. Ask Axess Law for a referral to insolvency experts.
Canada's major credit bureaus, Equifax and TransUnion, collect credit and debt information from any institution where you borrow money, make lease payments, take out credit cards or owe judgments, like courts and tribunals.
Exceeding your credit limit, missing payments or applying for multiple credit cards or loans can all affect your credit score. It can take years to fix a damaged credit report. Equifax and TransUnion keep bankruptcy records for up to seven years and longer. Second bankruptcies can cause your credit score to be damaged for 14 years.
Insolvency trustees give you practical advice you can use to keep your credit record in better shape. Your next mortgage or car loan depends on it.
Preventing Foreclosure Before It Happens
Canadian real estate foreclosures are more common than you think. Acting quickly can help prevent your financial situation from getting to that point.
Communicate Early and Often
Instead of simply stopping mortgage payments, contact your lender as soon as you lose a job, have more bills than you can afford or need more time to make payments. Your lender may be willing to accept interest-only payments, extend the amortization period to reduce monthly expenses or blend a high interest rate with more favourable rates.
Quitting Your Mortgage
If your situation is not about to improve, a quit claim deed allows you to walk away with no financial obligations. Reassigning your investment to a next-of-kin relieves you of the payments, avoiding foreclosure proceedings.
Axess Law can transfer the title if you are sinking beneath the weight of mortgage debt.
Flat Fee Legal Services in Ontario
Axess Law's low cost flat fee rates are all-inclusive -- no surprises and no hidden charges. Ask us for a quote for the legal services you need. We refinance mortgages for $799.99 and up. You pay just $999.99 to buy real estate in Toronto area or $799.99 and up to sell homes. Transfer ownership of a house in Ontario starting from only $649.99.
Make Online or In Person Mortgage Appointments
Our virtual real estate lawyers can video conference online anywhere in Ontario. Axess Law has open law offices, Toronto and area, for in-person appointments. Call our 1-877-402-4207 lawyer line to make appointments or use our easy online booking form.