Power of Sale:

• A common procedure where the lender evicts residents and sells the property to recover the debt.

• It’s faster (under 4 months) and requires the sale at fair market value, with remaining funds returned to the homeowner. You can challenge an undervalued sale and sue for the difference if the sale was rushed.

Foreclosure:

• The lender takes full ownership of the property and has the right to sell or rent it.

• This process is much slower (can take over a year) and the lender does not have to sell at fair market value.

• No funds are returned to the homeowner, and if there’s a shortfall after the sale, the lender cannot sue for the difference.

How to Respond:

• Immediate Action: Don’t ignore a Power of Sale notice. Call your mortgage broker immediately to explore options like securing a second mortgage to pay off arrears or refinancing the defaulted mortgage.

  Option 1: Secure a second mortgage to pay off arrears and legal costs.

  Option 2: Refinance the defaulted mortgage, though lender options may be limited.

  Option 3: If other options fail, sell your home at fair market value before the lender takes control.

  Final Option: If refinancing or getting a second mortgage isn’t possible, consider selling your home at fair market value before the lender takes control.

  Important Note: Always contact your mortgage broker right away to discuss these options and avoid losing your home. Timing is critical in these situations to keep your options open.