One of the scariest experiences you can go through is the worry that you will lose your home. If you miss even one mortgage payment, you run the risk of ending up in default, which can start a legal process that ends with you out on the street. Has your lender already notified you in writing that you are in default? Then it’s time to talk to a real estate attorney to make sure that all of your rights are upheld. This article is not legal advice but instead is just about an overview of the two different legal processes that can lead to the loss of your home – foreclosure and power of sale. Do you live in the Durham Region of Ontario? Are you in danger of default? HOS Financial has solutions for you, even if the legal process is already underway.
How does foreclosure work?
When most people think about losing their homes to the bank, foreclosure is what they think of first. This involves a legal process whereby a judge finds that foreclosure is necessary and, at that point, ownership of the house changes from the borrower to the bank. Your debt is satisfied, and the bank can take no further action against you. Here are some of the basics of this process:
What is a power of sale?
The “power of sale” process ends the same way as foreclosure, in that the defaulted borrower ends up losing his or her house. The main difference has to do with the way the transfer of ownership happens. With a power of sale, the transfer happens at the sale of the property, when it goes directly from the borrower to the buyer. Another difference is that the borrower can end up on the hook for more money afterward, depending on how the sale goes. Here’s an overview of how a power of sale works:
What if you’re in the default process right now?
Have you already gotten a letter indicating default? Consider the HOS Financial rent to own program. You sell the house to HOS Financial – and then you use the proceeds to pay off your balance. Then, you start a lease purchase contract with HOS Financial. You stay in your own home, and you pay rent each month. Some of that rent goes into a savings pool for a down payment on your next mortgage. Once the lease is up, you go to the bank and start a new mortgage. Your credit report doesn’t show anything about a power of sale or a foreclosure – which means your financial life isn’t in ruins. If you’re curious about how we can help people in the Durham Region, give us a call today!
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