To stop a power of sale, foreclosure in Toronto the property owner will need to address the concerns of the lender that started legal proceedings. Typically lender will use these legal actions once a borrower fails to pay their mortgage. To stop legal proceedings, the borrower must work with their lender to address their concerns. It is very important that the property owner act quickly, we recommend that you contact us to discuss your options.

There are two legal remedies available to lenders in Toronto when a borrower is in default of a house mortgage. One legal remedy is the foreclosure process the other is the power of sale process. Most lenders in Toronto use the power of sale for process because it is faster and cheaper.

Lenders can send the borrower a notice of default when the loan is at least 15 days in default. If the default is not corrected the borrower will then receive a statement of claim outlining the terms and costs. As the property owner it is usually in your best interest to bring the mortgage into good standing and stop the legal process. Work with your lender to keep legal costs low. If alternative financing is required, call our mortgage agents to arrange a loan.

Stop a Power of Sale

In Ontario the power of sale process officially begins when a person receives a Notice of Sale document. The Notice of Sale will explain exactly how the borrower was in breech of the mortgage agreement and how this can be fixed. Typically, at the beginning, the mortgage can be put back into good standing by paying all the missed payments plus fees. Once the Statement of Claim document is sent, the lenders have the right to request the full amount of the mortgage be paid, including missed payments and fees.

The most common way of paying the amounts demanded by the lender is to get a new mortgage. For people with first mortgages in power of sale, it may be possible to get a second mortgage to pay the amounts demanded by the first mortgage lender. For second mortgages in power of sale, the most common solution is to replace the existing second mortgage with a brand-new mortgage. In the best case situation, lenders can provide mortgages up to 75% of the value of the property. This maximum loan amount can be lower for rural areas or during times of economic hardship.

When a house or commercial property is put up for power of sale, the lender will usually hire a real estate agent to sell the property. The goal is to sell the property for the highest price that the real estate market will bear. The actual selling price of the property could be higher or lower depending on the condition of the property or carrying costs of the property. The property owner will have no input on the selling price or marketing of their property.


Foreclosures are a valid legal option for lenders, but are very rare to see in Ontario. A borrower must be made aware if they are facing a foreclosure upon recing a Statement of Claim. The Statement of Claim must expliclty state that the process is a foreclosure rather than a power of sale. Foreclosures involve a significant amount of court time and can take years to complete. Many borrowers that face foreclosure are able to petition the court in order to convert the legal action into a power of sale. Foreclosures are very expensive and can result in your property being taken away from you. A foreclosure is considered to be a harsher remedy compared to power of sale, as it allows the lender to take all the homeowner’s built up equity. The original owner will not receive any money from the property.

Buying a Power of Sale or Foreclosure Home

Most people know that buying a foreclosure or power of sale house is cheaper. As the owner of a house that is in power of sale, it is usually in your best interest to sell the house before the bank takes the house. As a buyer of a power of sale home you purchase the house in “AS IS” condition. This means that as the buyer you assume all risks related to buying the house. We strongly recommend that buyers have a real agent and lawyer that are familiar with the power of sale process, small errors can cost the purchaser tens of thousands of dollars, this is one of the reasons why power of sale houses are cheaper to buy.

Helpful FAQ Post

Can I Stop a Foreclosure?

A foreclosure is a legal remedy used by a lender to try to recoup their financial investment in a property. A foreclosure means that the lender is taking ownership of your property. The lender will assume all debts, liability and any equity in the house. If your property has a large amount of equity, you should take immediate action to try and stop the foreclosure. Learn more

Please call for a free consultation on Toronto power of sale homes.

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