2025-05-07
How to be a responsible credit card user
Credit cards are a popular and convenient form of credit that can be a very useful tool.
What Happens To The Shortfall On My Mortgage If It Is Insured?
2009-04-20
Author: Donna Carson
What an insured mortgage does is give your bank protection in the event you ever default on your mortgage. They have an insurance policy that they can recover the shortfall from.
For example.....if your home is worth $350,000. Your mortgage balance is $375,000. You default on the mortgage and it goes into foreclosure.
The bank would get a Court Order to sell the house for the $350,000. And the $25,000 shortfall (plus the foreclosure costs) they would recover from the insurance policy, whether it be CMHC, Genworth, AIG.
The insurance carrier (not the Bank) would then proceed against you for the $25,000 shortfall.
If a mortgage is not insured and there is a shortfall, the Bank can NOT pursue you for the shortfall. It is only the insurance carrier who can.
This assumes that this is a typical, conventional mortgage. And not some type of other loan secured by your house.
In the event you have a shortfall on your residence and your mortgage is insured (whether you have defaulted yet or not), the shortfall is one of your creditors that you want to keep in mind when assessing which option is best for you. The shortfall can be included in a bankruptcy or a proposal to your creditors.
Donna Carson
CIRP, LIT, CPA
Senior Vice President
Servicing: Calgary (Downtown), Red Deer, Drumheller, Calgary (NE), Airdrie
Latest Blog Posts
2025-04-25
Understanding debt collection in Canada: Protecting your financial health
Debt collection can be a daunting experience for many Canadians. Navigating the process alongside MNP’s team of experts can help you better understand how it will impact your credit score and gain the knowledge needed to maintain your financial health well into the future.
2025-04-25
Top five mistakes to avoid when considering filing for bankruptcy
Bankruptcy
Filing for Bankruptcy is a significant decision that can provide a fresh start for Canadians overwhelmed by debt. However, it’s essential to approach this process with caution and awareness to avoid common pitfalls and make informed decisions to protect your financial future.
