How to Stop a Mortgagee Sale Before It’s Too Late 

How to Stop a Mortgagee Sale Before It’s Too Late

Life can throw a curve ball at anyone. Perhaps you are facing an income dip and just cannot afford your mortgage payments anymore. There’s lots of advice out there about how you can raise extra income, including renting out the house while you downgrade to a smaller more affordable home, to pay-off the mortgage.

But what if you don’t want the hassles of being a landlord?

What if you cannot attract rent that’s sufficient to cover the mortgage bill?

Even if you are willing to let go of the home, you should still avoid a mortgagee sale. A mortgagee sale will damage your credit standing. Plus, you may still owe the lender even after recouping proceeds from the sale.

Use these steps to stop the mortgagee sale before it’s too late.

Reach out to a Financial Advisor and Review Your Position.

You should have done this way back when you started experiencing financial difficulty. But, it’s not too late. If you have a registered personal consultant that’s great news. Go ahead and reach out. If you don’t and are concerned about how much you’ll pay you can try:

Talk about your financial position. Review your budget and see what you can afford.

As you engage with the financial adviser, don’t forget to reach out to the lender and talk about options including restructuring the loan, refinancing or a mortgage holiday.

If none of them work out, have your lawyer talk with the lender’s lawyers and seek more time and more options as follows.

Refinance

This is a mortgage with a different lender, this won’t change the fact that arrears may have occurred or your financial position. Nonetheless, if you feel that your current bank or lender doesn’t have the right terms for you. Or, perhaps you’ve come across another bank that has more appealing terms, then you can request a transfer of credit.

Mortgage brokers can help you arrange for refinancing with other reputable and more flexible lenders. The rate might be slightly higher, but it may be the straw that saves you from drowning and buys you more time.

Get a Guarantor

Guarantors too may not change much of your financial status. But, a good guarantor could go a long way in reducing the risk faced by a lender, if they could be open to that. Also, a lender who has already served you with a notice served under the Property Law Act (2007) may be more considerate and willing to give you more time to get affairs in order or discuss alternative arrangements – however this not a guarantee.

Sell the House

The bottom line for anyone who wants to stop a mortgagee sale is; get your finances in order and reach out to the lender. None of the steps above will work if your finances are not in order or don’t talk with the lender. You will still be facing a mortgagee sale.

A notice served under the Property Law Act (2007)gives you a window of at least 20 days before the lender can move to mortgagee sale the property. This time is too short to get a good price and sell the home.

You must reach out to the lender and seek an extension of the deadline. They don’t have to agree with you. But lenders also abhor mortgagee sales and would rather have you sell the property without the stigma of a mortgagee sale. It attracts a better price.

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