Updated September 2026
In the United States, foreclosure is the word everyone knows. In Ontario, most lenders use a different remedy called power of sale. The difference matters whether you are a homeowner who has fallen behind on your mortgage or a buyer looking at a lender's listing.
Frank Polsinello has handled power-of-sale files for six different lenders over 16 years, so this is a part of the market our team knows well.
How power of sale works
A power of sale comes from Ontario's Mortgages Act and the terms of the mortgage itself. It is a private process, without a court supervising it.
Default, then notice. The lender can't serve a Notice of Sale until the mortgage has been in default for at least 15 days.
A waiting period. After the notice is served, the lender has to wait at least 35 days before taking further steps.
The chance to fix it. Until the home is sold, the owner can usually stop the process by paying what is owed, plus the lender's reasonable costs. The longer it goes on, the more it costs to stop.
The sale. The lender sells the home to a buyer. It has a duty to act in good faith and take reasonable steps to get a fair price.
The money. Sale proceeds pay the lender's costs and the mortgage first, then other registered debts. Any surplus goes to the owner. If the sale doesn't cover what is owed, the lender can sue the owner for the shortfall.
How foreclosure is different
It is a court process.
The lender ends up owning the home instead of selling it to a third party.
The owner loses any equity in the home.
Once it forecloses, the lender generally can't also sue for a shortfall.
It usually takes much longer, which is one reason power of sale is the more common choice in Ontario.
If you are behind on your mortgage
Don't ignore the letters. Call your lender as early as you can, and see a lawyer the day a Notice of Sale arrives. Depending on your equity and your situation, the options can include a payment arrangement, refinancing, or selling the home yourself on the open market before the lender does. Selling on your own terms usually gives you more control over timing and price. Any equity left after the mortgage and costs are paid stays with you in either case.
If you are buying a power of sale home
Power of sale listings can be good buys, but they carry more risk than a standard resale.
As is. The lender has never lived in the home and gives no promises about its condition, or about the appliances and other contents.
The lender's schedule. Expect extra clauses written to protect the lender. Have a lawyer read them before you sign.
The owner can still redeem. Until closing, the owner may be able to pay off the mortgage, and your deal can end.
Price. Because the lender has to seek a fair price, don't expect a steep discount. Popular homes can still get multiple offers.
Due diligence. Make your offer conditional on an inspection, check for permits and any occupants, and have your deposit and financing ready.
Why experience matters here
On the lender side, Frank keeps a complete audit trail on every power-of-sale file and uses offer documents drafted for these sales rather than standard forms. On the buyer side, that means we know what a lender's schedule usually says before you are asked to sign one.
This article is general information, not legal advice. If you are facing a Notice of Sale or considering a power of sale purchase, call us at (905) 830-9111.
