When the Bank of Canada catastrophically messed up its reading on inflation by surging rates way too quickly, they put the housing market in a difficult position. Now, many Canadians who bought property at the height of COVID when rates were at record lows, are looking at lower equity, and much higher mortgage payments. 10 rate hikes in about a year will do that to a real estate sector, no matter how strong it is. If you have been put in a position where you can no longer afford your mortgage and are now looking down the barrel of a power of sale scenario, this article is for you. We’ll discuss how you can stop power of sale default situations through a private mortgage loan with Tembo Financial. We’ll also explain “stigma equity,” a term coined by Tembo Financial, and its significance. Additionally, we’ll explore why Tembo offers a better alternative to big banks, which often rush to settle for the first offer. We’ll also delve into how we collaborate with clients to navigate challenges, optimize market terms, and unlock hidden value.
A key feature of Tembo’s private mortgages is the ability to exercise stop power of sale/default provisions. Unlike traditional lenders, Tembo Financial provides flexibility to work closely with clients facing financial hardships. When borrowers struggle to meet mortgage obligations, Tembo offers solutions such as paying out the bank, extending the loan tenure, and ultimately achieving better market outcomes. This approach helps clients retain their property and avoid a rushed sale by big banks or lenders, who often settle for the first possible transaction. Tembo’s solution empowers homeowners to control their sale and maximize their sale price.
“Stigma equity” is a term coined by Tembo Financial that refers to the difference between the listing price of a home under power of sale (often lower due to negative perceptions) and its true market value. Tembo specializes in helping clients leverage stigma equity to their advantage. By collaborating with clients and offering tailored solutions, Tembo Financial can often help revive, increase, or enhance a property’s value, bridging the gap between its distressed value and its actual potential. Many clients have successfully used Tembo’s financing to pay out the banks, renovate their properties, and control their sale despite financial hardship.
In conventional banking scenarios, the power of sale process can lead to rushed sales and lower prices to recover dues quickly. Tembo Financial approaches this differently. Instead of rushing into a sale, we adopt a more deliberate and strategic approach aimed at maximizing value and allowing homeowners to sell on their terms, not the bank’s. We get the banks off your back and work with you to find the best option. By paying off the bank and gaining the necessary time to position the property more favourably in the market, we help achieve a higher selling price.
Effective handling of power of sale and default situations is a hallmark of private mortgage lending. Tembo Financial uses a personalized approach, engaging in open dialogue with clients to craft solutions that align with their circumstances. This enables us to offer customized financing solutions that cater to a broader range of properties than traditional lenders.
Unlike traditional bank lenders, Tembo Financial has the luxury of time on our side. This means we help clients avoid settling for the first offer during a power of sale situation. Big banks aim to conclude power of sale transactions quickly, viewing them as mere numbers on a ledger. At Tembo, we prioritize maximizing value for our clients by allowing them to control the sale of their home. Through a strategic approach and assessment of the property’s true potential, we can often pay out the bank and provide a short-term loan, alleviating the stress of a power of sale proceeding. This patient approach, coupled with creative financing solutions, sets us apart in the real estate landscape.
Tembo Financial and our private power of sale lending solutions offer an alternative avenue for collaboration with clients, surpassing the constraints of big banks. Our ability to exercise stop power of sale/default, diminished stigma equity, and strategically manage power of sale helps homeowners secure favourable outcomes across Ontario. As the real estate market continues to evolve, Tembo understands how to harness these advantages to assist our clients during difficult times