I Think Im In Financial Trouble And Am Worried About Losing My Home

2010-09-16

Assuming that you have a mortgage on your home and you start to fall behind on the payments, yes....the Bank can take steps to foreclose on the home.  It's important for you to talk to the Bank about options to deal with the mortgage.  Can they defer payments?  Will they not send it to their legal department if you can put a plan together to catch up? If something does happen to the house and the Bank starts foreclosure, you need to be aware of whether or not you are at risk with the shortfall.  You would be personally liable on such a shortfall if it was an insured mortgage.  IE:  you didn't have a large enough down payment when you bought it, and the Bank required CMHC, Genworth or some similar insurance.  These are typically called "high-ratio mortgages."  When the Bank ultimately sells or forecloses on such a home, they will submit a claim for the shortfall to the insurance company.  The insurer then has the right to go after the borrower for this shortfall. This only applies to these high-ratio mortgages.  If it is not such a mortgage and their is no insurance, then the Bank can only take the home back.  They can not sue you for the shortfall.  This will still show up as a delinquency on your credit report though. If the loan was a secured line of credit, you would be liable for any shortfall.  The above "insurance" only applies to conventional mortgages. I'm not sure if you have any other creditors.....but considering your options as to what to do with them may free up your income to help save your home?  If a bankruptcy or a proposal to your creditors is something you're looking at, you are entitled to keep $40,000 equity in your residence in Alberta. If you have a chance, give one of our counsellors in your area a call to discuss the specifics of your situation.  They can be found on our site athttp://www.mnpdebt.ca/contact/alberta/default.aspx. Donna Carson, CGA, CIRP, Trustee 1.877.500.0792    [email protected]