POWER OF SALE
For the Mortgage Lender
It has been probably two decades since there were abundant power of sale actions in the GTA. Most Realtors today have little knowledge of the workings of a mortgage forced sale.
Barry Lebow has lived through the downturns of the 1970s, the 1980s and the 1990s. He has sold multiple power of sale and foreclosure residential and commercial properties. He has attorned rents and property managed during the arrears period. He has also been a private lender and has had to invoke powers of sale. For many years, Barry was an active mortgage broker and instructor of the courses for the mortgage broker exams.
Today, Barry will undertake the following for a lender:
- meet with the homeowner/mortgagor and discuss the best methods to make the process as beneficial as possible for both parties;
- using a method that Barry started in the 1980s, he found a way to achieve the highest possible pricing for a power sale, when there is co-operation with a reasonable homeowner
- he will arrange for independent appraisals from members of the Appraisal Institute of Canada;
- he will provide an additional Realtor letter of valuation;
- when vacant, he will arrange for locksmith services;
- he will deal with any clutter, debris left by homeowners;
- he will oversee minor repairs to make the property more saleable;
- he will ensure that the house is cleaned and shows to its best;
- he will then list and market to ensure that the house sells.
- for commercial properties, Barry will work to create an accurate income and expense statement;
- where there are tenants, Barry will can attorn the rents and property manage in the interim period.
(Note, some services are above normal real estate brokerage services and will be quoted in writing on an a la carte basis).
Power of Sale and Foreclosure, not known to the majority of Realtors who are less than 20-25 years in the business. Trust experience in this field when listing!
For the Homeowner
First, do not panic. You are not in a good place but there are solutions. As a Realtor with more than 50 years of experience Barry Lebow can help.
- if possible, the existing mortgage financing may be able to be restructured;
- if possible, new financing can be arranged to clean up the original loans;
- Barry will work with your existing lender to help you stay as long as possible in your present home;
- Barry will respect you, your circumstances and assist you wherever possible.
Note, under the law, when a house is sold under Power of Sale a lender cannot make a profit. They must pay the homeowner any excess funds once the sale closes and when all costs are added up. Surplus funds belong to the former homeowner.
You have the right to redeem the debt and to put the mortgage back into good standing. As well, if your property has sold and closed, you have the right to a true accounting of all costs. A lender cannot legally pad the bills or overpay. You have the right to challenge the costs if you believe that they are excessive and above reasonable norms.
Most traditional lenders will render true accounts. Private lenders have been known to add costs that are excessive.
Barry has the experience to advise you in this difficult time based on his involvement in hundreds of mortgage actions during his career.
What is Power of Sale?
In a Power of Sale the lender, the mortgagee forces a sale on the open market. Most times the mortgagee sues for possession which forces the homeowner (the mortgagor) out of the property. This takes time, it requires a separate action. Some mortgagors fight eviction and if there are some strong circumstances (a relative dying at home) there may be a stay.
What Is the Procedure?
A Realtor must be given directions to list the property close to the appraised pricing and in accordance with the market. A power of sale does not give the lender license to blow out the property at a bargain price. A below market sale can lead to the mortgagor suing later for an inprovident sale.
The lender has to maintain the house, which in the winter means heating. They become responsible for the insurance and other costs to keep the house on the market. They will cancel things like internet and possibly shut off the water.
Many lenders do not pay the realty taxes during their holding period but rather wait for the sale and proceeds to clean up the tax arrears. The lender has to be careful that they realty taxes are not overdue by years as the municipality can take action and sell the house under a tax sale.
What About a Tenant?
What About Secondary Financing?
Does the Mortgagee Owe an Obligation to the Mortgagor?
I am In Default on My Mortgage, What Can I Do?
Next, shop around for new financing via a reputable mortgage broker.
If you need more income to survive, rent your basement if you are in a house for the income.
If you are truly in dire shape, if there is no hope, speak to the lender and accentuate the process. Talk them about a Quit Claim Deed which means that you surrender the house to them but that stops them from coming after you later for any shortfall.
If you are in the early stages of a financial problem, call in a top Realtor who will be your trusted advisor and sell your home before you lose it. Many lenders, once they know that your home is for sale to pay them off will wait and allow you to proceed provided that you are marketing the house at true market value.
Barry Lebow has years of experience in the Power of Sale Process and is easy to communicate with to discuss your situation. Nothing to be embarassed about, cards on the table and let’s get your family’s needs looked after over all else.
Note: The answers herein are not to be considered independent legal advice or any other advice outside of the expertise of real estate transactions solely. Any party who wants to consider an answer herein should seek independent legal or other professional advice before proceeding.