Facing a Mortgagee Sale? Here are 4 Ways You Can Slow It Down
Facing a Mortgagee Sale? Here are 4 ways which may help the process
Without a doubt, facing a mortgagee sale is a scary prospect. Nonetheless, receiving a PLA Notice does not necessarily mean that you will automatically lose your home. You can do many things to help which may buy more time; this could help you to get back on your feet and at least keep your financial record in the best possible shape.
Read on and find out what you can do to slow down the process.
What’s a Mortgagee Sale?
If you signed up for a home loan, you’ve agreed to charge your home’s title to the bank or lender. You also agree to pay back the entire loan according to the terms set out on the mortgage contract. Failure to pay or any other breach of the contractual terms gives the lender (mortgagee) the right to issue a notice under section 119 of the Property Law Act (2007) to recoup their investment.
A mortgagee sale happens when the bank or lender forcefully sells a property to recover a loan.
PLA Notices usually give a window of about 20 days for the homeowner to remedy the situation. This is a short time to make things happen.
How Can You Slow Down the Process?
First, Educate Yourself
It may sound ironic because of the amount of stress you have to deal with, but this is the time you need to have as much information about the mortgage, and lender, as possible.
Take some time and read over all communications from the lender concerning the mortgage. They are likely to have information about the lender’s mortgagee sale process, and ways you can salvage it.
It’s advisable to get help from a qualified legal professional, like a lawyer, as you go through these communications. You will understand them better. Plus, legal assistance may identify areas where you can challenge the contract or PLA Notice.
Reach Out to the Lender
If you have a PLA Notice at hand and you would like to save your home, you have no option to do what you should have done eons ago. Reach out to the bank or lender.
When you reach out to a lender you should:
- Explain why you missed payments.
- Make it clear that you understand you must pay back according to the contract terms.
- Propose possible ways you can catch up.
- Request for assistance from the lender to get back on track including restructuring the loan or refinancing.
Clearly, this step should be taken sooner than later. Receiving a PLA Notice means you’ve not taken action on previous alerts.
But don’t let this stop you now.
Banks and mortgage lenders also prefer working out a solution with the homeowner as opposed to turning to mortgagee sales. It explains why the statistics of mortgagee sales in strong housing markets like Auckland are so low.
Get in Touch with a Mortgage Broker
Mortgage brokers will help you to organize your finances and offer diverse solutions.
They will help you come up with a plan; this can either be a short-term solution, such as refinancing for a six to twelve months period where you organize your affairs or sell your property. Or you can get long-term solutions, like refinancing through the same or a different lender.
Finally, Consider Selling the Home
If you must give up the house it may be best that you do this on your own terms, this means engaging a real estate agency to sell the property which typically helps you obtain a higher price.
Lenders have an obligation to follow a fair selling process. However, the stigma of a mortgagee sale can significantly drive down the selling price of a property. Lenders know this and many give leeway for the homeowner to sell the house without the stigma.
Try to ask for an extension of the PLA Notice deadline.