After losing his job, Mark defaulted on his mortgage for his townhome in Oakville. His lender, ABC Bank, has initiated power of sale proceedings. What is one of the primary obligations of ABC Bank under the Mortgages Act during this process?

Question: After losing his job, Mark defaulted on his mortgage for his townhome in Oakville. His lender, ABC Bank, has initiated power of sale proceedings. What is one of the primary obligations of ABC Bank under the Mortgages Act during this process?

Answer options:

• To obtain the highest possible price for the property, even if it means delaying the sale indefinitely.
• To negotiate with Mark to find a buyer who will assume his mortgage. ✅ To sell the property for a fair market value, ensuring Mark is credited with any surplus after expenses.
• To sell the property to a related party at a discount to recover outstanding debt quickly.

Correct answer: To sell the property for a fair market value, ensuring Mark is credited with any surplus after expenses.

Explanation: Under the Mortgages Act, a mortgagee exercising a power of sale has a duty to act in good faith and to take reasonable steps to obtain fair market value for the property, accounting to the mortgagee for any surplus.