Can You Really Walk Away from Your Mortgage? Here is more on personal recourse and insured mortgages4/8/2016 As we all know, there are 3 mortgage default insurance companies in Canada - CMHC, Genworth and Canada Guaranty. Every borrower will pay mortgage default insurance premium when buying a home with less than 20% down payment to protect the lender. In the event when a lender suffers a loss, they will make a claim to the default insurer:
Even though the default insurance company will cover the lender’s loss, with the above deductible were applicable, the default insurer can, and will, in turn pursue the borrower personally for the deficiency, hence “personal recourse”. The insurer would likely sue the borrower for any losses they have to cover, so if the borrower has any assets, the insurer will go after him. Handing over the keys to the house and walking away from a mortgage, was a defining act of the American housing crisis and helped send the market south of the border into a deeper trouble back in 2008/2009. So-called non-recourse mortgages are the rule in at least 10 U.S. states where consumers jumped at the opportunity to escape a mortgage that was more than the actual value of their house once the market started to fall.
Did you know who is a major owner of the 3rd mortgage default insurer Canada Guaranty? - Ontario Teachers’ Pension Plan Have a fantastic weekend despite the not so Spring weather today! Sign Up Here for Monthly Mortgage Updates
0 Comments
Leave a Reply. |
Hey There!Please Feel Free to Leave a Comment on my Blog Post! Categories
All
Archives
February 2019
Categories
All
|