Power of Sales Properties - What are they and how can I get them?

What is a Power of Sale Property?

When a borrower defaults on a home mortgage, the lender may attempt to recover its losses by repossessing and selling the property. However, because of legal fees, foregone interest, and property expenses, estimated losses on these foreclosures range from 30 percent to 60 percent of the outstanding loan balances.

There are other variables that can affect the losses or costs as foreclosures and power of sales properties, one of which is the time it takes to process the paperwork in the courts.

Definition of Power of Sale: A clause commonly inserted in a mortgage and deed of trust that grants the creditor or trustee the right and authority, upon default in the payment of the debt, to advertise and sell the property at public auction, without resorting to a court for authorization to do so.

Once the creditor is paid out of the net proceeds, the property is transferred by deed to the purchaser, and the surplus, if any, is returned to the borrower or debtor. The debtor is thereby completely divested of any interest in the property and has no subsequent right of redemption—recovery of property by paying the mortgage debt in full.

You will often see advertisements about Court Auctions, Pre-Forclosures, Homeowners in Bankruptcy, HUD Homes, VA Homes, Government homes and similar sounding wording. In my experience, many of these types of properties come out of the US and are not as common here in Ontario.

In our trading area, most of the Power of Sale (POS) or foreclosure properties are put on the Toronto TREB MLS. The reason for this is that our laws are very strict about the procedure and marketing of a power of sale property and the company or person who is initiating the power of sale must do their best to obtain market value for the property. Otherwise if the property is sold too far under market value, the owner could sue the lender for the shortfall.

Would you like to automatically receive new MLS listings of residential Power of Sales or Bank sales or Foreclosures in the Toronto or Mississauga and Oakville areas? This would include new power of sale and bank sale listings as they are added to the MLS database system. Click the graphic below to sign up.



Please send me Power of Sale listings in the GTA and Mississauga areas.

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com