Losing your home to a mortgagee sale is one of the most stressful experiences a family can face. The good news? Many sales can be avoided if the problem is dealt with early. Time is often the single biggest factor that determines whether you lose your home or protect it.
If your situation has progressed and you’re running out of workable options, it’s important to act quickly. At this stage, the focus shifts from catching up on repayments to preventing further escalation and protecting your home.
A mortgagee sale happens when a lender forces the sale of a property to recover unpaid mortgage debt after a borower defaults on their loan. In New Zealand, this typically happens after missed payments and formal notices under the Property Law Act. The lender takes control of the sale process to repay the outstanding loan balance.
This stage is typically reached after an extended period of financial difficulty, when earlier attempts to resolve the situation have not been successful. If your situation is earlier in the process and you are trying to catch up on missed repayments, you can learn more about mortgage arrears in New Zealand here.
If you have only recently missed a payment and are trying to get back on track, you can learn what to do after a missed mortgage payment here.
Avoidance and procrastination are very human reactions to stress – but at this stage, delay can significantly reduce your options. The earlier you act, the better your chances of avoiding a mortgagee sale.
If your situation has reached this point, it’s important to seek advice immediately. We specialise in solutions to help avert mortgagee sales, including refinancing your mortgage where needed. We’ll work with you on a short-term plan to stabilise things and an exit plan to return to better lending terms.
We’ll explore non bank lending options in New Zealand that can provide short-term relief and set you up for a stronger l/refinance/ong-term solution.
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Here is a real example of how acting, even at a late stage, can still lead to a positive outcome:
Recently, a young family found themselves in a difficult position. Due to a combination of financial pressures, their mortgage had gone unpaid for six months, and they received a PLA (Property Law Act 2007) Notice, confirming default on their owner-occupied property. Meeting the required payment by the dealine was not possible, and a mortgagee sale was becoming increasingly likely.
The family sought budgeting advice and began taking steps to regain control of their finances. However, at this stage, budgeting support alone was not enough to resolve the default. To save their home, they needed a lender willing to take out the existing mortgage and consolidate the other debt that had contributed to the situation of them defaulting on their mortgage.
To achieve a workable outcome, Platinum Mortgages pulled together a team of experts, including an experienced solicitor, and secured a lender prepared to support the family. The loan was structured with a 12 month interest-only terms period, along with the requirement that the clients continue with the budgeting support and provide regular financial updates to the lender. The credit defaults were cleared, and legalcosts were incorporated into the refinance.
Once the clients demonstrate a consistent payment history and improved financial position over that period, the plan is to transition the loan to a long-term lender with more favourable interest rates and terms.
While the outcome could have been less stressful if action had been taken earlier, seeking help at this stage utlimately allowed the family to avoid a mortgagee sale and stablise their situation.
Many clients in similar situations also ask, can I still get a mortgage if I have debt? The good news is that, with the right advice and lending approach, solutions are often still available.
If your situation has progressed to this point, taking action now can make a significant difference to the outcome. While the options may be more limited than they were earlier, it is often still possible to stabilise the situation and avoid further escalation.
Whether you are already in default or at risk of a mortgagee sale, the most important step is to seek advice as soon as possible. Acting early can help preserve more options and improve your chances of protecting your home.
We work with clinets in complex situations and understand that every case is differnt. Our focus is on:
We won’t judge past circumstances – our focus is on helping you move forward with a safer financial future. Don’t wait until it’s too late – get in touch with us today and let’s work together on a solution to protect your home.
