For ease of simplicity I am going to assume that there isn’t any equity in your house. That means that if you sold your house and paid of the mortgage and costs there wouldn’t be any money left over.

2 years ago in Windsor the answer was simple; as long as your mortgage payments are up to date the mortgagor will keep your house. Unfortunately things have changed for some mortgage companies. I remember meeting with a mortgage lender in 2006 and they told me how good their rates were and if someone was in bankruptcy or consumer proposal it wasn’t a problem. They even told me that if someone new in a consumer proposal came to them for a mortgage; as long as there consumer proposal payments were current they would most likely be accepted.

Now, I am hearing a different story. Certain lenders are refusing to renew mortgages in Windsor even though the client has been in good standing with the payments. They have decided that they only want clients with absolutely perfect credit. If you filed a bankruptcy or consumer proposal you no longer have perfect credit. I have even spoken with people who have not filed a bankruptcy or consumer proposal and the lender is refusing to renew them because their other debt is too high, or they no longer have good credit.

What does this mean for people who already filed bankruptcy or a consumer proposal and are now losing their house? In many cases, since they would be responsible for the shortfall on the mortgage once the house sells it could mean having to let the consumer proposal fail and file for bankruptcy. For other people it might mean a second bankruptcy.

When you meet with me in Windsor, I will share my experience with lenders. However, if the plan is to keep your house, my advice is always the same; call the mortgagor to confirm what their current policy is with renewals.

If you are having financial difficulties and are concerned about your house, feel free to call me at 519-250-8060 or 310-PLAN or email me.