A mortgage is the most significant debt of most people’s lifetime, which explains why defaulting on it brings so much stress and dread.
One of your top priorities, if you've found yourself in that position, should be to find a mortgage lawyer in Mississauga. They can assess your unique situation and provide you with the guidance and representation you’ll need as your lender becomes progressively more forceful.
For a general idea of what to expect now that you’ve defaulted on your mortgage or are close to doing so, keep reading.
If you’ve only missed one payment or you’re anticipating problems with making payments in the near future, you are not necessarily in default.
Your mortgage is considered under default when your lender has officially classified it as so and is attempting to recover the full balance on the property.
For some lenders, yes, just one missed payment can be enough to put this process in motion. But others have different policies and may you let miss a few before your account is under default.
You typically get a 30-day grace period after your first missed, though this varies for different lenders. Expect calls and emails reminding you that your payment is late, but nothing drastic or threatening.
If you’re not responsive, the calls get more frequent and you’ll start to get letters mail. Your lender will be completely clear about what they’re prepared to do next. You’ll know when they’ve decided that you’ve defaulted on your mortgage.
Shortly after, you’ll also learn the steps they have decided to take.
It’s important to remember that you can still negotiate with your lender during these stages. You may be able to agree on a revised payment plan spread out over a longer period.
If you’re able to come to an agreement, you’ll most likely pay higher interest than what was outlined in the initial terms. It’s still a much better outcome than losing your property or being foreclosed.
After your lender informs you that they consider you to have defaulted on your mortgage, there are two routes they can take.
Following Ontario’s Mortgages Act, lenders can decide to sell the property to a third party after a default. This is the solution most banks and lenders opt for. It’s the least complicated way forward and it gives lenders a chance to recoup the balance.
If this is the route your lender decides to take, you’ll get a letter informing you of their decision no more than 45 days after you default.
If you have equity in the home, the remaining balance goes to you after your lender receives the mortgage balance in full. They’ll also deduct other expenses such as administrative fees and
The only way to stop this process is to pay the remaining balance in full.
Alternatively, your lender may decide on initiating foreclosure proceedings against you. They will try to get the full legal title to your home.
If there’s equity or finances from a future sale, your lender is not obliged to give you a share.
Whether you’ve already defaulted on your mortgage or you fear you’re about to, let Atlas Law Group help. Our mortgage lawyers can help you explore all the options available to you and guide you to the best outcome. It’s a tough and daunting time, but we can help you through it with skilled legal representation. Schedule a free consultation with us today.