ARTICLE · 03 SEPTEMBER 2024

Foreclosure vs. Power Of Sale – What Are The Differences?

Devry Smith Frank LLP

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One of the unfortunate circumstances of defaulting on mortgage obligations is the possibility of foreclosure or power of sale.

CanadaFinance and Banking

Devry Smith Frank LLP

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One of the unfortunate circumstances of defaulting on mortgage obligations is the possibility of foreclosure or power of sale. These terms are often, but incorrectly, used interchangeably. Both foreclosure and power of sale result in repossession and sale of the home, but the manner in which the repossession occurs differs depending on which process is used.

Power of Sale

A power of sale is the most common forced sale process. A power of sale occurs when the mortgagee (the lender), obtains the legal right to evict the occupants of a property due to a default in their mortgage payment. The mortgagee then sells the property to recover any funds owing.

The power of sale process begins with the issuance of a Notice of Sale by the mortgagee. Once that is granted, there is a 35-day redemption period in which the mortgagor (the borrower), can bring mortgage arrears current.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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