Varun Kohli September 6, 2023 No Comments

In this article, we’ll explore the possibility of stopping power of sale default situations through a private mortgage loan with Tembo Financial. We’ll also discuss “stigma equity,” a Tembo Financial term, and what it is. In addition, we’ll outline why Tembo can help offer the option of not yielding to a big bank and settling for the first possible offer (what big banks generally prefer). Additionally, we’ll explore how we can collaborate with our clients to weather challenges, optimize market terms, and unlock hidden value.

Understanding Stop Power of Sale/Default

One of the standout features of a Tembo private mortgages is the ability to exercise stop power of sale/default provisions. Unlike traditional lending institutions, Tembo Financial specializes in providing the flexibility to work closely with our clients and borrowers facing financial hardships. When a borrower encounters difficulties in meeting their mortgage obligations, Tembo can offer alternatives such as paying out the bank, offer more flexible terms, extending the loan tenure, and ultimately provide a better market outcome. This approach helps our clients retain their property and avoid a big bank or big lender simply exercising power and sale and locking in the first possible transaction. There is zero flexibility in this option, and it severely limits the debtholder. Tembo’s solution lets the homeowner control their sale and maximize the sale price.

Unveiling “Stigma Equity”

“Stigma equity” is a Tembo Financial term gaining prominence in the private real estate lending landscape. It refers to the difference between the listing price for a home that is listed under power of sale price (often lower due to negative perceptions and the thought that the buyer can get a deal) and its true market value. Tembo specializes in working with our clients to harness stigma equity to their advantage. By collaborating with clients and offering tailored solutions, Tembo Financial can help revive, increase, or enhance the property’s value, bridging the gap between distressed value and its actual potential. We’ve helped countless clients use financing to payout the banks, reno their properties to increase value and allow the homeowner to control their sale despite being in financial hardship.

Rethinking Power of Sale for Banks

In conventional banking scenarios, the power of sale process can lead to rushed sales and lower prices to recover dues quickly. Tembo Financial, however, can navigate this differently. Instead of rushing into a sale, we can opt for more a deliberate and strategic approach aimed at maximizing value and allowing the homeowner to sell on their terms and not the banks!. We’ll get the banks off your back, and work with you to find the best option. Paying off the bank to extend their position and gain the necessary time to position the property more favourably in the market is our approach. This approach can result in a higher selling price.

Managing Power of Sale and Default

The ability to handle power of sale and default situations effectively is a hallmark of private mortgage lending. Tembo Financial has a personalized approach which allows us to engage in open dialogue with our clients. This enables us to craft solutions that align with the client’s circumstances.

Securing Better Market Terms

We often have a unique advantage when it comes to negotiating market terms. With a focus on individual property evaluations and a willingness to consider unconventional properties, we can provide tailored financing solutions that cater to a broader range of properties than traditional lenders.

Going Beyond the First Offer

Unlike traditional bank lenders, Tembo Financial has the luxury of time on our side. This means we can help clients avoid the trap of settling for the first offer that comes along during a power of sale situation. A big bank just wants to conclude the power of sale as soon as possible. They look at these transactions as numbers on a ledger. We are in the business of maximizing value for our client by allowing them to control the sale of their home.  By taking a strategic approach and assessing the property’s true potential, we can payout the bank and provide a short term loan so the client can sell quickly and alleviate the stress of a power of sale proceeding. This patient approach, coupled with the ability to offer creative financing solutions, sets us apart in the real estate landscape.

Tembo Financial and our private power of sale lending solutions can provide an alternative avenue for us to collaborate with our clients in a way that goes beyond the constraints of the big banks. The ability to exercise stop power of sale/default, diminish stigma equity, strategically manage power of sale all while helping the homeowner secure a favourable home across Ontario!.

The real estate market continues to evolve, and Tembo understands how to harness these advantages to help our clients during difficult times

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