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ARTICLE · 23 APRIL 2019

What Happens If I Default On My Mortgage?

Devry Smith Frank LLP
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A mortgage on your home will most likely be the most significant debt you will incur in your lifetime. A commitment in which you will be obligated to pay for a considerable amount of time

CanadaFinance and Banking
Robert Adourian
Robert Adourian
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A mortgage on your home will most likely be the most significant debt you will incur in your lifetime. A commitment in which you will be obligated to pay for a considerable amount of time – in the majority of cases anywhere between 10-30 years.

That said, when a borrower defaults on their loan and from their obligations in the mortgage agreement, the lender has two possible remedies.

Power of sale

This is the most frequently used remedy.

Pursuant to Ontario's Mortgage Act upon a mortgage default the lender is entitled to determine that the mortgaged property in question should be sold to a third party. This remedy, if you will, is by far the least complicated and permits the lender to recoup the balance remaining. The lender however, must give the borrower written notice by registered mail 45 days after default.

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