Experienced Mortgage Enforcement Lawyers in Toronto

Private mortgage lending can be a lucrative and mutually beneficial arrangement for both the lender and the borrower. There are a number of circumstances that may prevent a borrower from obtaining a mortgage through a traditional lending institution, such as a bank, when buying a home. For example, people with extensive credit, non-residents or self-employed individuals could face difficulty when looking to finance the purchase of a home or another significant expense. This is where private lenders can be of assistance. Because the loan is negotiated between two independent parties, they can determine the terms independent of regulations or policies in place with respect to Canada’s financial institutions.

Most of the time, these arrangements work as intended, however, sometimes it becomes necessary for the lender to enforce their interest if a borrower defaults on scheduled payments under the terms of the loan. In this case, a lawyer experienced in mortgage enforcement is crucial.

At Prudent Law, our lawyers have extensive experience working with private lenders in real estate matters, and as a result are highly knowledgeable about private lending arrangements and how to enforce them when necessary. We can act quickly to secure a client’s interests and advise on the most appropriate remedy under the circumstance.

The Remedy of Power of Sale in Ontario

To protect their financial interests, lenders will often include a Power of Sale provision in a private mortgage. This grants the lender the right to sell the property in the event of a default in payment, generally after a notice period of 35 days following the lender’s initial notice to the borrower. If the arrears are not paid during that time, the lender can move ahead with selling the home in order to recoup their investment. Should the proceeds of the sale exceed the amount owing under the mortgage, the excess will go to the borrower. In cases where the proceeds are insufficient to cover the arrears, the lender also retains the option of bringing an action against the borrower to make up the difference.

A borrower can challenge a Power of Sale in court if they feel that it was issued without reason or is otherwise defective. This is why it is essential to have sound legal advice prior to entering into a Power of Sale proceeding.

Foreclosure Proceedings in Ontario

While a Power of Sale enables the lender to sell a property when the borrower is in default, foreclosure proceedings have the effect of transferring ownership of the property in question to the lender. Unlike with a Power of Sale, the lender becomes entitled to the entire proceeds should the property be sold, even if they exceed the mortgage amount outstanding. However, unlike in a Power of Sale, the lender will also have to accept any shortfall if the proceeds do not cover the arrears, as they will be barred from bringing an action against the borrower to make up the difference.

Contact Prudent Law in Toronto for Experienced Advocacy in Mortgage Enforcement Matters

The lawyers at Prudent Law are trusted advocates for private lenders in Ontario. With offices in both Toronto, we provide practical advice and work to enforce our clients’ rights and protect their interests when it comes to private mortgage loans. If you are a private lender and require the help of an experienced litigation lawyer to enforce an existing mortgage, please call us at 905-361-9789 or contact us online.