Receiving a power of sale notice is one of the most overwhelming moments a homeowner can face. It means your lender has started the legal process of selling your home due to unpaid mortgage arrears. Once this notice arrives, time becomes your most valuable resource. Acting quickly, within the first 48 hours, can dramatically increase your chances of stopping the process, protecting your equity, and saving your home.
This guide breaks down Ontario’s power of sale procedures, the urgent steps you must take in the first 48 hours, how to manage arrears, where to find emergency financial options, and how to prevent this situation from happening again.
Understand the Power of Sale Process in Ontario
A power of sale is a legal remedy lenders use when a borrower defaults on their mortgage. Default typically means missed mortgage payments, but can also include:
- Not paying property taxes
- Failing to maintain property insurance
- Intentional property damage
- Illegal use of the property
Although the timeline may vary based on your mortgage agreement, lenders can generally send a Notice of Sale 15 days after default.
Once this notice is issued, the homeowner enters a Redemption Period, 35 days (or 40 for married couples living in the home). During this window, you can stop the process by paying what you owe:
- Mortgage arrears
- Accrued interest
- Penalties
- Legal and administrative fees
If the arrears remain unpaid after the Redemption Period, the lender may sell the property. But even then, they must:
- Sell it for fair market value
- Provide the homeowner with any remaining surplus after debts and costs are paid
You still retain important rights throughout, but acting quickly is key.
Immediate Actions to Take Within the First 48 Hours
The first two days after receiving a Notice of Sale are critical. Here’s what you must do immediately:
1. Contact Your Lender
Ignoring calls or letters speeds up the process. Instead:
- Tell your lender you intend to resolve the issue
- Ask for a full, updated statement of arrears (including interest, penalties, legal fees, and costs)
- Request confirmation of deadlines and payoff amounts
Most lenders prefer resolving the issue with the borrower rather than selling the home. Communication buys time.
2. Call a Lawyer or Mortgage Professional Right Away
An experienced professional can:
- Review your lender’s documents for errors
- Confirm whether timelines or calculations are correct
- Advise on legal rights, deadlines, and options
- Provide strategies for refinancing, reinstating, or negotiating
Professional intervention often slows unnecessary escalation and ensures no detail is missed.
Understanding Mortgage Arrears
A mortgage is considered in arrears when payments are 3 months or more overdue. According to the Canadian Bankers Association (CBA), lenders:
- Closely monitor arrears
- Attempt early communication to prevent default
- Offer payment adjustments when appropriate
Common lender solutions may include:
- Deferred payments
- Interest-only payments for a limited time
- Adjusted payment schedules
- Temporary hardship arrangements
These relief strategies can prevent power of sale, but only if you communicate early.
Explore Fast Financial Solutions (48–72 Hour Options)
Stopping a power of sale often comes down to accessing funds quickly. The options below are the fastest ways to halt proceedings:
1. Private Mortgage or Second Mortgage
Private lenders approve and fund loans in days, sometimes even within 48 hours.
These loans rely primarily on equity, not:
- Beacon score
- Income verification
- Debt ratios
They are typically:
- Short-term (1-year)
- Interest-only
- Designed to buy time until a long-term plan is in place
This is one of the most effective emergency strategies to stop a power of sale.
2. HELOC or Debt Consolidation
If you still qualify through a traditional lender or credit union:
- A HELOC can cover arrears
- Consolidation may reduce total payments
- Improved cash flow may keep future payments on track
3. Refinance with an Alternative Lender
If your credit or income doesn’t fit bank guidelines, a mortgage broker can place you with a lender who focuses on:
- Equity
- Property value
- Payment history over time
Alternative lenders offer more flexible solutions and faster approvals than banks.
Preventive Measures: How to Avoid Power of Sale in the Future
Stopping the current crisis is important, but preventing another one is essential. Here’s how:
1. Create a Realistic Budget
Track:
- Monthly income
- Mortgage payments
- All recurring expenses
Prioritize your mortgage above discretionary spending.
2. Build an Emergency Fund
Even small contributions add up. Savings protect you from:
- Sudden income loss
- Unexpected repairs
- Medical costs
3. Review Refinancing Opportunities Regularly
Refinancing can:
- Lower monthly payments
- Extend amortization
- Reduce financial strain long-term
4. Stay in Communication With Your Lender
Early conversations prevent issues from escalating. Lenders often have hardship programs designed to help.
Protecting Your Home: Take Control Before It’s Too Late
The first 48 hours after receiving a Notice of Sale matter more than anything else.
Your best steps are to:
- Respond immediately
- Communicate openly
- Seek legal and financial guidance
- Secure short-term funding if needed
Swift action, combined with informed decision-making, can stop the process entirely and give you the breathing room you need.
But the best strategy is prevention, budgeting, planning, and staying financially aware reduce the risk of ever entering power of sale again.
Ready to access your home’s equity? Let’s find the best solution for you.
📞 1-866-702-9394
🌐 www.burkefinancial.ca
