Archive for Category 'Mortgage'

Question: I’m behind on property taxes but have made payment arrangements with the municipality. I would like to sell my house to get completely debt-free. Can I use the proceeds from the sale to pay off the property taxes? Is this something that can be negotiated at the closing and the lawyer pay the City?

Answer: When the house is sold, the property taxes will automatically get paid first, even before the mortgage.  The city will not let you transfer ownership until the taxes have been paid, so yes, your lawyer will arrange with the city for the property taxes to be paid on closing.

Question: We were served with papers that the mortgage holder will be taking possession of our home. My husbands plan is to lock the doors and move away. My fear is coming home to changed locks and life time of memories auctioned off to strangers.
Is there anything at all that we can do to save our home?
It is currently for sale which was agreed upon by all parties involved.

Answer: If the mortgage holder has notified you that they are starting power of sale proceedings, you should discuss your options with the mortgage holder.  If they have agreed to allow you to sell the house, then it seems strange that they are now proceeding with a power of sale.

If you cannot reach an agreement with them, then your husband’s approach is correct.  You should find a place to rent, and move, so that none of your possessions are in the house when the bank changes the locks, if that is what they are going to do.

For more information, you should consult a lawyer or a trustee in bankruptcy; they will want to review the actual letters and documents the mortgage holder has sent you so that they can advise you fully.

Question: Hello! Can you please tell me if you fall behind in credit card payments or just pay small payments to credit card companies….can they sue you or place a lien on a mortgaged home? We are a one income home(pension), car is on a loan and our home is mortgaged. Can they take our home, force us to sell or move out? I am very worried! I do not want a consumer proposal or go bankrupt. I thank you in advance. M

Answer:  In theory, yes, if you default on your payments the credit card company could take you to court, sue you, obtain a judgment against you, and then enforce that judgment by placing a lien on your home.

However, that is very unlikely.  Since your home already has a mortgage on it, there is probably not a huge amount of equity.  Also, the credit card company, in order to get their money, would have to sell the home and pay off the first mortgage holder.  It is unlikely they will want to spend that much money to collect what you owe them on your credit card.

You should attempt to make payment arrangements with the credit card company.  If that’s not possible, it may be time to consider your other debt management options.

Question: Is a Consumer Proposal a better option than a 2nd Mortgage with a private lender?

Answer:  It depends on the cost of the second mortgage, and the cost of a consumer proposal.

Our debt options calculator can give you a rough idea of the cost of the consumer proposal, and your lender can tell you what a second mortgage would cost.   You can then compare the two options and decide which option is best for you.

If you have substantial equity, and can qualify for a second mortgage, that may be the best option.  If however you don’t have much equity, and you can’t afford the mortgage payments, a consumer proposal may be the best option.  A trustee can provide you with a no charge initial consultation to explain the costs of the consumer proposal in more detail.

Question: my husband and I are considering going bankrupt due to over whelming debt. We have a mortgage and are terrified of loosing our house. Our mortgage is with the bank and we think the property value is going to be close to the mortgage that is on it now. Would they foreclose if there was say $5000-$10,000 equity?

Answer:  It is doubtful that the bank would foreclose if your mortgage payments are up to date; you should contact the bank prior to declaring bankruptcy to get confirmation directly from them.

The other issue is that if you have equity in your home, the trustee in bankruptcy is required to collect that equity from you.  In simple terms, if you have $10,000 in equity, you would be required to pay the trustee $10,000 in order to keep your home.

The amount of equity you are permitted to keep varies in each province, so before making a decision you should contact a bankruptcy trustee.

Question: Question is do I have to wait until actual discharge to be able to apply for a mortgage?

We will be released in May 2009 but not discharged until Apirl 2010, can we apply for a mortgage now? To purchase a home prior to discharge? Like soon????

Answer:  In today’s economy it is almost impossible to qualify for a mortgage while you are an undischarged bankrupt.  It may only be possible if you have a co-signer.  You should consult your bank or a mortgage broker for more information, and to determine what you need to do to qualify for a mortgage after bankruptcy.

Question: My husband and I are separating, and I will be buying a house. We have lots of money and we have never taken out a loan. I will not be taking any of our shared money, except $80 000 for a downpayment on a house and the fees that go along with it. I am hoping to buy a house worth $300 000. At this point, I think my husband may have to sign the loan, which he is willing to do if necessary. Because neither of us have ever had a loan, we have no credit records. I know this is unusual, and I don’t know what to expect from lending agencies. I am middle-aged and have a good, steady income. I know that paying off the loan will not be a problem, but I am not sure the banks will see it that way.
Thanks for your help.

Answer: If you have a sufficient down payment and a good income, it should not be an issue.   You could also consult with a mortgage broker for further information.

Question:  I purchased a home six months ago and now due to cutbacks at work and partner going in a seperate direction we can not afford to keep it.
We want to sell but I’m confident we will not get what we paid and here is my question.
Can we sell the house when I know I won’t get enough to pay the mortgage, do I need to call the mortgage holder or CMHC to inform them and make some sort of deal to cover the shortage?

Any good advice is welcome.

Answer:  Yes, you should discuss this with your lender.  The purchaser can only take possession of your house if your mortgage is discharged.  If the sale proceeds are not sufficient to repay the mortgage, it is possible that the lender will not allow the sale to be completed.  Therefore, they should be informed in advance, and in some cases they will allow the sale to go through so that they can at least recover most of their money.

If there is a shortfall it is likely that they will then pursue you and your ex for the shortfall, so you will need to consider your options for dealing with that as well.

Question: I have a consumer proposal which I am half way through paying off. I got a copy of my credit bureau because I am trying to qualify for a mortgage. When I pulled my bureau I noticed that the mortgage company had hit my bureau very heavily and it dropped my score a lot. I also noticed that two of the creditors that are included in my proposal are on my bureau but no indication is there stating that the accounts are being paid off.

If these two creditors are included in the consumer proposal and if they are to stay on my bureau should they not at least say that they are being paid?

What can I do about the hits to my bureau from the mortgage company? (in some cases it shows it being hit 3 times in one day)

Should the trustee for my consumer proposal be the one to report to equifax about the two creditors and make the admendments?

I don’t know if I am suppose to go to the creditors or through the trustee to get these items fixed. I sent in paperwork to Equifax months ago and nothing has changed.

Can you help me … I am sure I am not the ony one with this problem.

Thanks

Answer:  Our advice to anyone who is currently in a consumer proposal or a bankruptcy is always to deal directly with your trustee.  Only they are fully aware of your circumstances.  On this money problems web site we can only give you generic answers, that may not match exactly with your situation, since we don’t know all of the facts.

Here is the generic answer:  Your trustee reports your consumer proposal to the Office of the Superintendent of Bankruptcy, and they in turn report it to Equifax and Trans Union.  Each individual creditor also reports to the credit reporting agencies.   It would appear that the creditors have not accurately reported the proposal.

We suggest the following approach:

First, contact each creditor and request that they update your credit report to show that their debt is included in your proposal.

Second, contact both credit bureaus again and ask them to correct the information.

Finally, talk to the mortgage company and ask them to notify the credit bureaus that they erroneously hit your credit report three times in one day.

We should also note that given the current credit crisis it is currently very difficult to qualify for a new mortgage while you are still in a consumer proposal, so it may be necessary to wait until you have completed your proposal to attempt to get a mortgage.

Question: I had a mortgage with the Bank since Dec of 2001. In 2006 we were behind with our property taxes. I decided to sell my home to downsize but before doing this i called the bank and i told them i had gone bankrupt in 2005 and that i had been thinking of selling my home to downsize and because of the bankruptcy would i be okay to do this. The lady from the bank told me there wouldn’t be any problem . So i sold my home in no time and then i called The Bank to asked approximatley the price of homes i could begin looking at. My heart sunk when the woman told me there is no way i would get a mortgage with them as i had went bankrupt. I even went straight to the bank in tears and asked to talk to the manager, although he was very sympathetic he couldn’t help me. Well it is now three years later and i have been renting a house for 1100 mth. when my mortagage was 800 mth. i have never gotten over this. Could you please tell me if the bank should be held in anyway responsible for me losing my home?

Answer: Obviously the bank misinformed you, but it is virtually impossible to fight a bank and get anything from them.

However, your situation is not as bad as you may think.

First, although your mortgage payment was only $800 per month, you were also paying property taxes and repairs and maintenance, so your total housing costs were probably the same or more than what you are paying in rent.

Second, since 2007 house prices have fallen substantially in every area of North America, and they will probably continue to fall throughout 2009.  In hindsight it may actually be a positive development that you did not own a home during this declining market.

Rather than worrying about the past, it is probably best to focus on the future.  House prices will probably continue to decline, so perhaps you should set as your goal buying a house in 2010 or 2011, after the market has bottomed.   You will be able to get a great deal on a house, and that gives you even more time to save an even larger down payment, which will keep your mortgage payments as low as possible.