What Happens If I Ignore a Notice of Sale?

What Happens After You Receive a Notice of Sale?

A Notice of Sale is one of the important stages in Ontario's Power of Sale process. It means the lender has begun taking formal steps to enforce its mortgage because the loan is in default.

Receiving the notice does not necessarily mean the lender is selling the property tomorrow. It does mean the situation has moved beyond simply missing a payment and needs to be dealt with.

Ignoring the notice does not pause anything.

One of the biggest mistakes a homeowner can make is assuming that if they do nothing, the lender will simply wait.

The lender can continue following the legal process. As the file progresses, additional legal fees, interest and other costs can be added to the amount owing.

The amount required to fix the problem can increase.

What begins as several missed mortgage payments can become considerably more expensive once lender charges, legal costs and accumulated interest are added.

That can also affect the property's remaining equity because every additional dollar owing reduces the amount that is left for the homeowner.

You may still have financing options.

Depending on the property's value, the total mortgage balance and the stage of the legal process, refinancing may still be possible.

That could involve an alternative lender, a second mortgage or private financing. In distressed situations, lenders often place significant weight on the property's equity position.

Selling yourself may also be an option.

If keeping the property is no longer realistic, selling it voluntarily before the lender completes the Power of Sale may allow you to maintain more control over the sale price, timing and overall transaction.

The important point is that both financing and selling options become harder to execute when there is very little time left.

Find out where you actually stand.

The first step should be to review the Notice of Sale, confirm the current mortgage balance and legal costs, determine the property's realistic value and calculate the remaining equity.

Once those numbers are known, it becomes much easier to determine whether the mortgage can be refinanced, whether the property should be sold, or whether another solution needs to be considered.