How Do I Stop a Power of Sale in Ontario Using a Private Lender?

Stonefield Capital can typically stop a power of sale in Ontario by refinancing the property before the redemption period expires.

What Is a Power of Sale in Ontario?

A power of sale is a lender's statutory right to sell mortgaged property when a borrower defaults, without a court order. Power of sale differs from foreclosure: the borrower keeps any sale surplus above the debt, but loses control of the sale process. The governing legislation is the Mortgages Act, R.S.O. 1990.

How Much Time Does a Borrower Have to Redeem?

Ontario's Mortgages Act requires lenders to serve a Notice of Sale and then wait a minimum redemption period before completing the sale. For residential properties with five or fewer units, that period is 35 days from service of the notice. The borrower can redeem (pay the full arrears, costs, and legal fees) at any point before the sale closes.

Acting early preserves the most options. Every week of delay narrows the window for arranging refinancing.

Why Does a Private Lender Help When a Bank Won't?

Banks and credit unions underwrite on income, credit score, and stress-test qualification. A borrower in power of sale often fails all three criteria. Private lenders like Stonefield Capital underwrite primarily on equity and exit strategy (the ability to repay or refinance at term end), so a temporary income disruption or bruised credit does not automatically disqualify a file.

What Does Stonefield Capital Look At to Approve the File?

• Equity position: Stonefield underwrites to loan-to-value; pricing is based on LTV and mortgage position. Current rate ranges are published at stonefieldcapital.ca/private-mortgage-rates.
• Exit strategy: How will the borrower repay or refinance at the end of the private term (typically 1–12 months)?
• Property type and condition: Stonefield lends across Ontario on residential, mixed-use, and select commercial properties.
• CRA arrears: A Notice of Assessment is always requested to confirm no large Canada Revenue Agency debt that would rank ahead of the mortgage.
• Income documents: T4s, T2s, or bank statements may be requested for servicing analysis, but missing income docs do not automatically kill a deal.

No minimum credit score applies. The focus is equity and a realistic path out.

Step 1 — Submit the File Immediately

Send the power of sale notice, current mortgage statement, recent property tax statement, and any existing appraisal or comparable sales data to Stonefield Capital. Brokers can use the broker portal or contact the underwriting team directly. The sooner the file arrives, the more calendar days remain before the redemption deadline.

Step 2 — Receive a Term Sheet

Stonefield typically issues a term sheet within 24 hours of receiving a complete submission. The term sheet confirms loan amount, rate, fees, and conditions. Borrowers and brokers should review all conditions immediately and begin satisfying them in parallel, not sequentially.

Step 3 — Engage Legal Counsel on Both Sides

The borrower must retain independent legal counsel to receive and review mortgage documents. Stonefield's lawyers prepare the commitment and registration documents once the term sheet is accepted. Funding in as little as 48 hours is possible when both sides have legal counsel ready; the bottleneck in power-of-sale situations is nearly always legal preparation, not underwriting.

Step 4 — Fund and Discharge the Arrears

On closing, Stonefield advances the mortgage proceeds directly to discharge the arrears, penalties, and legal costs claimed by the existing lender. The power of sale is stopped the moment those funds clear and the existing lender confirms redemption. The borrower then holds a new private mortgage registered on title, with a defined term to arrange longer-term refinancing.

What Happens After the Power of Sale Is Stopped?

The private mortgage term (typically 1 to 12 months) gives the borrower time to stabilize income, repair credit, and qualify with an institutional lender or sell the property at full market value. Because a Stonefield private mortgage is registered on title but not reported to credit bureaus, it does not directly move a credit score. Clearing the high-interest arrears and defaulted mortgage typically improves the borrower's credit profile over the following 1 to 12 months, which strengthens the exit.

Does Stonefield Capital Need an Appraisal?

In most cases, no formal appraisal is required. Stonefield runs its own comparable-sales analysis, which saves the borrower the appraisal fee and several days of processing time. If an appraisal is needed, Stonefield flags that requirement in the initial response, never at commitment or the last minute.

Is Stonefield Capital Licensed to Do This?

Stonefield Capital Inc. is a licensed mortgage brokerage in Ontario (FSRA Brokerage Licence #13722). Stonefield Mortgage Administration Inc. holds a separate mortgage administrator licence (FSRA #13636). All lending activity is Ontario-only and governed by the Mortgage Brokerages, Lenders and Administrators Act, 2006.

Frequently Asked Questions

How fast can a private lender actually stop a power of sale in Ontario?

Stonefield Capital can typically issue a term sheet within 24 hours of a complete file submission. Funding in as little as 48 hours is possible once both the borrower and Stonefield have legal counsel ready to proceed. In a power of sale, the bottleneck is almost always legal preparation, not underwriting. Submit the file as early as possible; every day of the redemption period matters.

What is the minimum equity needed to stop a power of sale with Stonefield?

Stonefield Capital does not publish a single minimum equity threshold, because pricing and approval are based on loan-to-value relative to the property and its position in the mortgage stack. Generally, the more equity available above the total debt being discharged, the stronger the file. Visit stonefieldcapital.ca/private-mortgage-rates for current LTV-based rate ranges, or submit the file for a direct assessment.

Can Stonefield lend if the borrower has bad credit or a recent bankruptcy?

Yes, in most cases. Stonefield Capital has no minimum credit score requirement and underwrites primarily on property equity and exit strategy. A recent consumer proposal, bankruptcy discharge, or collection accounts on file does not automatically disqualify a borrower. A Notice of Assessment is always reviewed to confirm there are no large CRA arrears that would take priority over the mortgage charge.

Will a private mortgage to stop the power of sale hurt the borrower's credit score?

A Stonefield private mortgage is registered on title but not reported to the credit bureaus, so it does not directly change the borrower's credit score. However, clearing the existing defaulted mortgage and any high-interest arrears typically improves the borrower's overall credit profile over the following 1 to 12 months, which matters most for qualifying with an institutional lender at the end of the private term.

What documents does a broker need to submit a power of sale deal to Stonefield?

A complete submission typically includes: the power of sale or Notice of Sale served on the borrower, the current mortgage statement showing arrears, a recent property tax statement, and any existing appraisal or MLS comparable data. Notice of Assessment for the borrower is always requested. T4s, T2s, or bank statements may also be requested for servicing analysis. Missing income documents do not automatically stop the deal — submit what is available and underwriting will confirm any outstanding items.