The city of Belleville continues to be an attractive place to call home and provides many attractions for visitors, especially during the summer months. Ideally located between Toronto and Montreal and a short hop to the US border, Belleville is a great spot to reside. As of the latest population census in 2016, Belleville’s population is 50,720. With a bustling city center and plenty of outdoor activities, the opportunity to buy property in the region continues to be a draw.
The last 16 months have been an unprecedented time for all Belleville homeowners and homeowners throughout the Province. With a pandemic that has dragged on through the majority of 2020 and into the first quarter of 2021, no one could predict how long we would have to endure repeated lockdowns, social distancing, and stay-at-home orders.
For reasons that have perplexed most real estate professionals, the Ontario housing sector has experienced unprecedented growth. Housing sales have far outstripped pre-pandemic sales numbers and appreciation in the average price of a home skyrocketing across the Province.
These numbers are reflected in the Belleville housing market. Recent real estate statistics reveal that the number of sales in April 2021 was double compared to April 2020 and represented not only a sales record but the highest number of monthly sales in history. According to Quinte & District Association of Realtors, home sales were 55.4% above the 5-year average and 62.7% above the 10-year average.
Fortunately, these robust housing numbers are also reflective of record-low default numbers throughout the Province. Regardless of the economic ripple effects due to the pandemic, the vast majority of Ontario homeowners have been able to keep up with monthly mortgage payments.
According to the Canadian Bankers Association, as of the latest February 2021 numbers, the total percentage of properties that have fallen into default is 0.10%, representing just 2,130 properties in mortgage arrears of the 2,086,163 owned properties in the Province.
Despite these low numbers, some Belleville property owners may have fallen behind in monthly mortgage payments. If a power of sale has been initiated on your property, it is recommended that you not only understand what the power of sale process entails but also take any step necessary to try to stop a power of sale or foreclosure on your valued home.
Power of Sale Vs Foreclosure – What Is the Difference and What Method is Used Most Frequently
A lender has two legal methods available when dealing with a property that has fallen into arrears: Power of Sale and Foreclosure. Both methods are designed to allow a lender to recoup any losses on a property and ultimately take possession of this property in the hopes to sell it if the mortgage is not put in good standing.
In Ontario, lenders choose to utilize the power of sale default method over foreclosure. What is the power of sale? In this default process, the lender has the right to sell the property. The lender has been given the power to sell a home or property. In the event of Power of Sale, the homeowner still owns the home, but the lender now has the legal right to sell it.
Any profit made on the sale of the property legally goes back to the property owner or borrower. The whole process can take as little as a few months (usually 6 months) at little cost to the lender. As a borrower, you will be subject to extremely high fees ranging up to 30,000 dollars in the power of sale proceedings.
In the foreclosure process, the lender takes over ownership of the property. The lender is responsible for all potential gains on the property as well as all liabilities. There are other key differences in the foreclosure process:
1. The involvement of the courts– In a foreclosure, a lender must make an application through the courts. It becomes a legal process involving lawyers and the court’s approval.
2. How the proceedings are initiated– In a power of sale, a notice of sale will be sent to the borrower informing them that the lender will be starting the power of sale process due to default. In the event of a foreclosure ( Judicial sale), the lender will have to apply to the court asking for permission for the court to start proceedings.
3. Time that each process takes- The foreclosure process takes considerably more time because of having to apply directly to the courts.
Steps in the Power of Sale and Foreclosure
Although the power of sale and foreclosure process differs in several respects, the steps that a lender will take are similar and clearly stated. A lender will need to follow these steps to legally carry out a power of sale on your home. The process in both default methods takes time and at any step along the way, there is an opportunity to put your mortgage back into good standing. The basic steps include:
- Lender Must Allow for 15 days– After a homeowner falls into mortgage arrears, the Ontario Mortgage Act requires that the lender provide a borrower 15 days to try to put the account in good standing before a lender can exercise the power of sale.
- Send a Notice of Sale to Borrower- Once 15 days have passed a lender is now entitled to send a notice of sale. The notice of sale letter will outline that the borrower has gone into default and that there is a redemption period to try to put the mortgage in good standing.
- Lender Will Issue a Statement of Claim If the redemption period has passed and the mortgage remains in arrears the lender has the legal right to issue a Statement of Claim to address the debt owning and take possession of the property
- Lender Can Take Possession of the Property– After the Statement of Claim has been issued and the borrower has neither paid off the entire mortgage loan plus legal fees nor put the mortgage in good standing, the lender is now in the position to take possession of the property and take legal steps to evict by having a lawyer draft a Writ of Possession to be filed with the court. The judge will then, provided it is approved, grant a Judgement of Possession. The current owners will be asked to evict the property at a specified date once the Sheriff has filled out the eviction paperwork. The Sheriff will send a Notice of Eviction which will specify the time and date that the homeowners must vacate the property. If they do not leave voluntarily, then they may be forcibly removed by the authorities from the property.
- Take Steps to Sell the Property- It is only at this step of the power of sale proceedings that the lender can legally take possession of the property and attempt to sell the property in the condition as is. Any remaining profit will go to the former homeowner but will be noticeably reduced through the substantial costs associated with a power of sale.
Ways to Stop a Power of Sale
For Belleville homeowners facing default proceedings, there are ways to stop a power of sale. The services of a private lender will be beneficial. At Mortgage Broker Store we will help you sit down with the right lenders to help you try to stop an imminent power of sale on your property. Your choices boil down to essentially three options:
- Take Out a New Primary Mortgage (First Mortgage)- Taking out a new first mortgage on your property is a good option to stop the power of sale and provide the funds to pay off mortgage arrears
- Take Out a Second Mortgage on Your Property-. A second mortgage will allow you to cover all the fees in the power of sale, any arrears owing your property, and manage the mortgage payments.
- Try to sell your property before the power of sale proceedings start– Try to sell the property before the lender takes over the legal right to sell it. This will avoid paying enormous fees and losing profit in the sale of your property under the power of sale.
Mortgage Broker Store Has a Network of Private Lenders
Mortgage Broker Store can help facilitate Belleville homeowners in their request to stop a power of sale process or those already in a power of sale. Let Mortgage Broker Store steer you in the right direction when contemplating your options.
With a network of lenders in the Belleville area, we will work diligently to facilitate your mortgage needs moving forward. Please feel free to contact us with any further questions you may have.