How does a property end up becoming a Distressed Sale or Power of Sale or Foreclosure or Bank Sale in the GTA, Mississauga, Oakville and Brampton?

There are many reasons why a property ends up in default and the company or person holding the mortgage sells the property in an attempt to get back some or all of their outstanding debt.

Reasons for Power of Sale and Foreclosure actions
Most of the reasons are common day situations that occur in our lives.  The most important reasons for foreclosure actions are:

• Job Loss
• Divorce or marriage split up
• Poor Economy in the area causes homeowner to move to another area and 'walk away' from the property
• Health problems of the homeowner
• Death in the family and executors or beneficiaries cannot handle payments on the property, possibly no life insurance and a mortgage remains after death
• Financial mismanagement by the homeowner
• Large Financial loss due to a Business failure
• Increasing Interest Rates upon renewal and the homeowner cannot make the new payments

If you are a homeowner who is facing the possibility of power of sale or foreclosure proceedings, you should not wait to take action to prevent their foreclosure.  If you take action right away you can often prevent foreclosure, protect your credit history, and save you plenty of money and trouble now and in your future.

Different provinces in Canada and states in the US have different time periods relating to foreclosure. Some are "short", which means that a family only has 21 days from the time of their foreclosure notice to when the house is sold at auction.  Others are longer periods, where you may have 4-6 months.

You will find that there are many types of the power of sale and foreclosure homes in Mississauga and surrounding areas.  The homes pictured above are similar to many home styles that you will find here in Mississauga and just outside of the GTA.  Let me show you how you can find these types of Power of Sale homes and show you how you can afford to move up to your dream home.  Please email me at mark@mississauga4sale.com  Or, you may use this form to sign up to my POS newsletter.

Power of Sale and Tax Sale properties - questions and answers

In Ontario, where my business operates, is a minimum 90-day period, meaning that once a Notice of Sale is recorded, the homeowner only has 90 days to resolve the situation before the house is sold at the discretion of the lender.  Often, especially in areas that have longer periods, homeowners facing foreclosure feel like they have lots of time, so they wait and do not take action to prevent their foreclosure from happening and to keep their credit standing from being trashed.

If nothing is done until a day or two before the sale, it is usually impossible to persuade the lender to postpone the power of sale and/or foreclosure proceedings at this point. There's just not enough time to put together the research and paperwork to send to the lender to convince them to hold off. 

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What are the Opportunities in Distress Sales and Power of Sales?

Buying distressed properties and real estate at the current market price does not give you the same investment opportunity as it did in years gone by.  One method of benefiting is to attempt to purchase your real estate ‘below market value’.  Here are the reasons why you may wish to consider purchasing a Power of Sale property:

• You would have a lower purchase price
• This would in turn lower your down payment
• This would produce Cost savings
• Price reductions
• The lower the price, the lower the down payment
• You would get more value for less money
• With a lower down payment and monthly payment, you may be able to purchase a bigger home or cover other expenses you have
• You are certainly dealing with motivated sellers and/or lenders
• Lenders are not in the business of owning properties, they do not want to keep the properties in their possession for too long and will eventually sell the property at or below general market value
• You would have Less Competition
• Many buyers are aware of foreclosure opportunities
• Better terms
• The buyer of the power of sale may receive better structured mortgages from the lender who is currently holding the mortgage as an incentive to purchase the property.

Typical Sources for Power of Sale Properties and Foreclosures in toronto and the GTA

• Local Magazines
• Reports and advertisements in local publications
• Journals published
• Local, regional and national newspapers
• Newsletters of all types
• Advertisers of these types of properties

Main Source for Power of Sale Properties and Foreclosures in Ontario

All of the sources above may lead you to find the occasional property, but in Ontario, Power of Sale properties must be marketed and an attempt must be made to sell the property for market value.  Reason for this is that the homeowner can attempt to recoup the amount they feel the property was sold for less than market value.  Again, in reality, this would seldom happen as the homeowner who walks away from a property usually has very little extra money to begin with, let alone the money and resources to sue a large bank or trust company who held the mortgage.  Thus, your main source of Power of Sale Properties is through:

• Real estate agents!
• Use this link to find Power of Sale Properties

Where to start looking for distress sales?

• Contact your real estate agent and ask your your agent to locate these distress sales for you - if they can't or don't know how to find them, read on!
• You can also look in you neighborhood - and the best approach is to look in the areas you are comfortable with and know the value of the properties
• Newspapers - Check your local Real Estate section and small ads for distress sale indications.  Look in Legal Notices & Auctions
• Banks - You can call your bank and banks in the area and ask them to forward you information on distress sales.  Most Banks will work with specific Real Estate agencies - I have access to all of these power of sale properties
• Real Estate Publications you may find ads in local Home Magazines
• Online Websites - Such as this site offer this service to people like you for free, sign up now

In Ontario, even once power of sale process has begun and the homeowner is removed from the home, the homeowner has the ability to bring the mortgage up to date and pay all interest and fees owing and move back into the property.  This means that they can move back into the property and stop a sale of the property up until very near to the closing date.  The reality is that once a homeowner is removed from the property (or chooses to leave) they rarely come up with the funds necessary to get their property back and the sale proceeds under power of sale.

Remember that the listing real estate agent’s job is to get the best price for a property that is for sale, whether it's a power of sale or foreclosure property.  Therefore, they might not be willing or able to promote and deal with discounted power of sale opportunities with you, which conflicts with one of the directives.  Thus, you will benefit from using the services of a selling agent such as myself to help you through all the complexities of purchasing a power of sale property and to represent your best interests for your purchase.  The listing agent is working for the seller.  I must help you get the property at the best price and terms for you.   Let's begin!

Would you like to automatically receive new MLS listings of residential Power of Sales or Bank sales or Foreclosures in the Mississauga and Oakville areas?  This would include new power of sale and bank sale listings as they are added to the MLS database system.  You may fill in the fields below and click the "Sign Me Up!" button below.   Due to very popular demand, this service expires in 90 days from your submission date and must be resubmitted.  What is a power of sale property?

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What is a Power of Sale Property? In Ontario when a borrower defaults on a home mortgage, the bank/lender most often attempts to recover its losses by selling the property using the Power of Sale clause contained in the mortgage.  Due to legal fees, foregone interest and other property expenses, the estimated losses to the bank for Power of Sale properties can range from 10 percent to 30 percent of the outstanding loan balances.  There are other variables that can affect the losses or costs when a property is sold via power of sale such as the deterioration of the property and the time it takes to process the paperwork. Definition of Power of Sale:  A clause commonly inserted in a mortgage and deed of trust that grants the creditor or trustee the right and authority, upon default in the payment of the debt, to advertise and sell the property through any means at it's disposal, usually MLS in Ontario or at public auction, without resorting to a court for authorization to do so. Once the creditor is paid out of the net proceeds, the property is transferred by deed to the purchaser, and the surplus, if any, is returned to the debtor.  The debtor is thereby completely divested of any interest in the property and has no subsequent right of redemption (recovery of property by paying the mortgage debt in full). You will often see advertisements about Court Auctions, Pre-Forclosures, Homeowners in Bankruptcy, HUD Homes, VA Homes, Government homes and similar sounding wording.  In my experience, some of these types of investment property opportunities come out of the US and are not as common here in Ontario.  In our trading area, most of the POS, Tax Sale properties or foreclosure properties are put on the MLS.  The reason for this is that our provincial laws are very strict about the procedure and marketing of a power of sale property and the company or person who is initiating the power of sale must do their best to obtain what is called TRUE market value as opposed to fair market value for the property, otherwise if the property is sold too far under TRUE market value, the owner could sue them for the difference.. Tax Sale Properties These types of properties do not occur too frequently in the GTA, but you may read more about tax sale properties By submitting this form you are agreeing to these terms.  By submitting this form you are also agreeing to sign up to receive my newsletter.  It could be worse!   You can always unsubscribe after you receive your first issue.  Privacy Policy  You may read the latest issue of my On-Line Real Estate Newsletter before you decide. Yes, I agree to the above I would have signed up anyway Yes, I agree, but I would prefer not to sign up | Agents and Realtors beware | Power of Sale Properties

You will receive a very fast answer from me, thank you and have a great day!  Mark