Jul 06, 2020
THE NEW REALITY: PRIVATE MORTGAGE LENDERS’ RIGHTS AND REMEDIES - Part XVIII of a Series – After the Expiry of the Redemption Period
Your private mortgage is in default. Your mortgagor is not paying. She or he continues to duck your calls and not return your emails and texts.
You hired a lawyer who has sent a demand letter and issued a notice of sale. All to no avail. And now, the 35 day redemption period in the notice of sale has expired.
What does the private mortgagee do next? In Ontario, there are various mortgage remedies available. And generally speaking, the mortgagee has the flexibility to take any one or more of these remedies in any order, or not at all.
These remedies available to a mortgagee include:
- taking possession of the mortgage property on its own (with no court order)
- suing for possession - obtaining a court order for possession - and obtaining possession using the local sheriff
- suing on the covenant for the amounts owing under the mortgage
- obtaining judgment for amounts owing under the mortgage and enforcing the monetary judgment
- listing the mortgaged property for sale
- selling the mortgaged property
- doing nothing and just waiting.
Many factors will come into play to help the private mortgagee determine it’s next steps following the issue of a notice of sale and expiry of the redemption period including:
- the time of year (is winter around the corner)
- whether the mortgaged property is a single family home or multi-unit residential
- whether the mortgaged property is vacant, owner occupied, tenanted, occupied by relatives of the owner or a combination
- the priority of the mortgagee's mortgage in default
- amounts owing to prior mortgagees
- whether the prior ranking mortgages are in good standing
- the amount of equity in the mortgaged property
- environmental issues
……..just to name a few.
The next blog will begin to examine possession issues; including a preview of becoming a mortgagee-in-possession. This blog is intended for information purposes only. It is not legal advice and cannot be relied on as such. Nor is it a substitute for hiring your own legal counsel, who will be an essential member of your mortgage default and mortgage remedy team. And lastly, this blog is just my opinion. I reserve the right to change my mind. And I reserve the right to be wrong.
Be well and stay healthy.