Mortgage Rescue

When you hear the term mortgage rescue it’s describing a plan to stop a house being sold at a mortgagee sale.

The mortgage may have been in arrears for some time and the borrower has been unable to remedy the situation.

The banks or other non bank lenders will then issue a Property Law Act Notice (PLA Notice) which specifies that the mortgage is in default, gives the borrowers a set date in which to remedy the default and then gives notice that if the default is not remedied then the mortgagee (the lender) has the power to take possession of and sell the property which is the security for the mortgage.

In most cases the PLA Notice will be the trigger that gets the borrower to understand the magnitude of the problem and this is when I tend to get contacted to see how we can help and this is what we describe as a mortgage rescue.

Should the borrower ignore the PLA Notice then the mortgagee (bank or other lender) will proceed to take possession of and sell the property which is the security for the mortgage.

At the mortgagee sale the property will be sold to repay the debt including all costs. If the property is sold for more than is required then that extra money is paid back to the borrower, but if there is a shortfall then the lender (mortgagee) can pursue the borrower and any guarantor for the shortfall and any additional costs. Often the properties sold at a mortgagee sale do not get true value as the sale does not promise vacant possession of the property, often the current owners are under stress and do not allow potential buyers full access and the mortgagee (lender) has no motivation to get more than to cover the debt.

You can read more about mortgagee sales here: CLICK HERE

I would strongly advise anyone who has received a PLA Notice to contact me urgently.

Arranging a mortgage rescue may not be as difficult as you think, but it’s best to get onto this early.