Tell-Tell Signs That the Bank Will Mortgagee Sale Your Home
There is no winner in a mortgagee sale situation. Both parties lose. The borrower goes through immense stress, and the lender loses a client. The mortgagee sale process also sends a ‘negative vibe’ to other clients.
Lenders prefer to avoid a mortgagee sale situation. Nevertheless, when the borrower is persistently unresponsive, the lender will engage the full recovery gear.
What signs will tell you that a lender has shifted to full recovery and about to mortgagee sale?
Read on and find out.
You’ve Been Unresponsive to Efforts by the Lender to Contact You
The first place to look is within. How responsive have you been to the bank’s efforts to contact you?
Banks often reach out whenever a client misses a mortgage payment. It usually begins with a polite reminder, then a request to regularize. After these reminders, the bank becomes more assertive and demands payment.
These calls are meant to avert a mortgagee sale situation.
Don’t hide your head in the sand or be unresponsive. Talk to your bankers about the financial difficulties you are facing. Under the Credit Contracts and Consumer Finance Act (CCCF Act) you have the right to request the lender to reorganize the loan provided you’ve not missed your mortgage payments.
So get in touch with your lender, and a mortgage broker to avert a mortgagee sale situation.
Received a Letter of Demand
This is the first indicator that the bank has engaged the formal process of recovery through a mortgagee sale. The letter will outline the amount in question and stipulate a deadline date by which you are to settle the arrears.
You should find a way to settle the debt. However, if you cannot remedy the debt as described in the demand letter, you should seek professional advice independently. A mortgage broker who specializes in how to stop mortgagee sales and a legal advisor, like an experienced lawyer, are excellent places to seek help.
Do this before you are the home is put up for sale through a mortgagee sale.
Received a PLA Notice
If you took the wrong turn and failed to respond to the bank’s demand, the lender can invoke the Property Law Act 2007, and issue a PLA Notice.
Like the letter of demand, the PLA Notice is required in the mortgagee sale process. It outlines the outstanding amount and a date by which you must settle. If you fail to clear the debt, the lender will have the right to repossess and sell the house to recover the loan.
You can still talk to the lender after receiving the PLA Notice and negotiate for more time or a settlement. Your best chance of stopping the mortgagee sale is by working with a mortgage broker and an experienced legal advisor such as a lawyer or solicitor.
But the bank is not obliged to agree to your proposal.
You Cannot Meet the Conditions on the PLA Notice
When a lender issues a PLA Notice, one of the conditions in the notice is to clear the debt. If you cannot pay the loan, the lender will sell your home to recover their money.
If you are in this position, try and stay positive and proactive. Lenders would prefer you organize the sale rather than to force their way. Try to sell the house at market rate. Hopefully, the amount should be sufficient to cover the debt and costs.