Tips to Help You Buy Time When Facing a Mortgagee Sale
When you use a mortgage to buy a home, the lender retains charge over the title until after you have paid off the entire loan according to the contract. If you fail to make payments, the lender has the right to repossess and sell to recover the debt. When a lender takes debt recovery steps, it is could end in a mortgagee sale.
But the lender must do it according to the law.
Although the process of a mortgagee sale may not be quick, a couple of weeks or months could feel like a few moments, especially when you are trying to save your home.
Fortunately, you are not helpless. You can buy time and avert a mortgagee sale.
Here are a few tips to help you.
Reach out to the lender
Don’t bury your head in the sand or assume that the lender will not do anything.
It might not be the easiest thing in the book, but you can face your adversary straight. It may feel embarrassing and you may not want to go through all that, but as Mark Twain puts it, eat the frog first. The other tips will feel a lot easier.
When you reach out to the lender, be ready to explain your situation and propose a repayment plan. The lender can accept or reject your proposal, or they can counter it.
It’s advisable to have an experienced mortgage broker by your side to help in the negotiation.
Pay the outstanding amount
The lender will demand full payment of all outstanding amounts. If you have already received a letter of demand or a PLA Notice, you will see this request appear conspicuously on the letter or notification.
Unless the lender has decided to recover the entire loan secured by the mortgage (after non-payment and expiry of a PLA Notice), they are most interested in receiving payment of only what’s outstanding. This could be a couple of missed installments, interests and penalties.
If you have a means of paying off the outstanding amount immediately, do so. You could sell off an asset, like a car, or stocks you hold and use the cash to repay the outstanding amount on the mortgage.
This will buy you much-needed time as you’ll have reset the clock back to zero and the debt recovery process back to start.
Talk to a suitably qualified lawyer with the right kind of experience
Mortgagee sales are often intertwined with legalities. It is always advisable to seek the help of a suitably qualified legal advisor like a lawyer to help protect your interests.
But some lawyers specialize in home rescue and they can do more than just advise you. You can have such a lawyer negotiate on your behalf and represent your interests.
Armed with legal expertise and experience in mortgagee sales, such a lawyer can negotiate, on your behalf, in ways that you couldn’t. They may be able to secure for you more time to sell the home without a mortgagee sale tag, get an alternative lender, or secure a more stable source of income.
Explore government assistance or insurance
Could it be that you are facing a mortgagee sale because you lost your source of income due to an accident, or an unforeseeable illness?
If that’s the case, you can reach out to the Accident Compensation Corporation, a Crown Entity that gives up to 80% income compensation if you are out of work due to injury.
Alternatively, check with your insurer if your policy includes some sort of loss-of-income cover. If it does, this could be a great boost to your mortgage payment efforts and an excellent bargaining chip for more time.
But you’ll need assistance from an experienced mortgage broker throughout the process.
Reach out to a Specialized Mortgage Broker
There are mortgage brokers who specialize in mortgage rescue and averting mortgagee sales. These brokers have a wider net of lenders whom they work with and can advise you on where to get emergency refinancing solutions, even with bad credit.
A bad credit mortgage broker can guide you through the above steps and also negotiate on your behalf with the lender. They can buy you more time to get the right solution and avert a mortgagee sale.