Mortgage Help

[Habsfan 64]

Hi my mortgage is coming due. My company informed me that they would be sending a registered letter saying they were not renewing my mortgage.

I never got the letter.

I never missed a payment, the only reason I can think of is my house dropped in price, they told me they were american co. and were getting out of Canada.

I went to other co. they said my credit score was OK. but no value in house as it has dropped.

Anybody have any ideas for me as I don't want to loose my house if I can help it.

Thanks.

 

[james t kirk]

And so it begins.

The bubble is about to burst it would seem. I haven't read about this sort of shit happening since the early 90's. At that time, Mortgage lenders would refuse to renew a mortgage for more than the house was worth regardless of whether or not you were paying your payments or not.

You take out a 500,000 mortgage on a $550,000 house. Five years later, the same house is worth $350,000, but you still owe $400,000 and they tell you that they will give you a mortgage for $315,000 and you have to come up with the difference yourself. So you walk away.

Insane.

We could very well be in for a 20% haircut in housing prices.

 

[Mikehorn]

Best bet is to do what I did, use a mortgage broker. They will work to get you the best deal they can. If you are in the GTA and want contact info for the one I used, PM me.

 

[james t kirk]

Hi my mortgage is coming due. My company informed me that they would be sending a registered letter saying they were not renewing my mortgage.

I never got the letter.

I never missed a payment, the only reason I can think of is my house dropped in price, they told me they were american co. and were getting out of Canada.

I went to other co. they said my credit score was OK. but no value in house as it has dropped.

Anybody have any ideas for me as I don't want to loose my house if I can help it.

Thanks.

So, if you can't pay them back, you sit and wait (not making any payments) till they send the sheriff, then buy your own house back for less than you currently owe.

But I'm sure there's some legal catch in there somewhere - unless your last name is Riechman.

 

[james t kirk]

Best bet is to do what I did, use a mortgage broker. They will work to get you the best deal they can. If you are in the GTA and want contact info for the one I used, PM me.

Yeah, but it's a case of the house is worth less than what he owes. Doubtful anyone will give him a mortgage for more than the worth of the house. Banks are funny that way.

 

[Why Not?]

Yeah, but it's a case of the house is worth less than what he owes. Doubtful anyone will give him a mortgage for more than the worth of the house. Banks are funny that way.

It is my understanding that the banks are prevented by law from loaning more than 90% or 95% of the appraised value of the house. This is to prevent the banks from becoming over leveraged and melting down like they did in Europe and the US in 2008.

 

[Why Not?]

So, if you can't pay them back, you sit and wait (not making any payments) till they send the sheriff, then buy your own house back for less than you currently owe.

But I'm sure there's some legal catch in there somewhere - unless your last name is Riechman.

The catch is if he is foreclosed on and the bailiff takes the house he will not be able to get a mortgage loan to buy the house back due to his destroyed credit rating. He will need cash to buy it back but if he had the cash he wouldn't have been foreclosed on in the first place.

 

[OddSox]

Check with a mortgage broker or two. Depending on your ability to pay and what other assets you may have, you might be able to get a second mortgage or something - it will cost you more though.

 

[Keebler Elf]

It is my understanding that the banks are prevented by law from loaning more than 90% or 95% of the appraised value of the house. This is to prevent the banks from becoming over leveraged and melting down like they did in Europe and the US in 2008.

But if the appraised value drops...

 

[toguy5252]

You should speak to a mortgage broker. If your credit score is OK you may very qualify for a first and second mortgage and perhaps an insured high ratio mortgage. If a bank gave you a mortgage then it would only have been to 75% of the then value of the house unless it was at the time a high ratio mortgage. House prices in Toronto have not declined that much that you will should not be able to refinance although the cost of the mortgage may be somewhat high than with your bank. Do not leave it too long.

 

[Why Not?]

But if the appraised value drops...

If the appraised value drops I don't believe that they are allowed to renew for more that 90 or 95% of the new value.

 

[Vixens]

Hi my mortgage is coming due. My company informed me that they would be sending a registered letter saying they were not renewing my mortgage.

I never got the letter.

I never missed a payment, the only reason I can think of is my house dropped in price, they told me they were american co. and were getting out of Canada.

I went to other co. they said my credit score was OK. but no value in house as it has dropped.

Anybody have any ideas for me as I don't want to loose my house if I can help it.

Thanks.

Mikehorn is giving you great advice. Use a mortgage broker. There are lots of lenders out there in addition to the major banks. The other company you spoke with cannot possibly know the value of your home unless they had an appraisal done...so...speak to a reputable broker. They will help.
You might also consider taking out a homeowners line of credit to try and offset any cash difference ... I believe they can lend you up to 80% of your homes value...interest rates are still quite low ( if your credit is good then you should be able to get prime or prime + 1 ).
Good luck!

Steph

 

[Don Draper]

Mikehorn is giving you great advice. Use a mortgage broker. There are lots of lenders out there in addition to the major banks. The other company you spoke with cannot possibly know the value of your home unless they had an appraisal done...so...speak to a reputable broker. They will help.
You might also consider taking out a homeowners line of credit to try and offset any cash difference ... I believe they can lend you up to 80% of your homes value...interest rates are still quite low ( if your credit is good then you should be able to get prime or prime + 1 ).
Good luck!

Steph

Never mind going to a broker.

Just hire Steph and she'll make Gordon Gekko look like a school yard marble moocher!

 

[Why Not?]

Mikehorn is giving you great advice. Use a mortgage broker. There are lots of lenders out there in addition to the major banks. The other company you spoke with cannot possibly know the value of your home unless they had an appraisal done...so...speak to a reputable broker. They will help.
You might also consider taking out a homeowners line of credit to try and offset any cash difference ... I believe they can lend you up to 80% of your homes value...interest rates are still quite low ( if your credit is good then you should be able to get prime or prime + 1 ).
Good luck!

Steph

I agree about seeing a mortgage broker. They seem to have more flexibility than the banks do.

As for a homeowner's line of credit, that is impossible. He is in this predicament because he owes more than the house is worth. With 0$ in equity in the home he will qualify for a 0$ loan. Such loans are made on a percentage of your equity in the home, not its worth.

If Habsfan has any sort of other asset or an RRSP he might consider getting some money there by selling it or taking money out.

 

[toguy5252]

Unless this was a high ratio or sub-prime mortgage to begin with it cannot be the case that there is no equity in the house. There is no are in Canada in which prices have dropped that much.

You say it was an American lender who is leaving Canada. There are a number who have left including Wells Fargo which was in the sub-prime business.

Was this a high ratio or sub-prime mortgage to begin with?

 

[jp61]

Doubtful anyone will give him a mortgage for more than the worth of the house. Banks are funny that way.

I have a recent rental property that my bank gave me 50% larger mortgage then the purchase price.

 

[Vixens]

I agree about seeing a mortgage broker. They seem to have more flexibility than the banks do.

As for a homeowner's line of credit, that is impossible. He is in this predicament because he owes more than the house is worth. With 0$ in equity in the home he will qualify for a 0$ loan. Such loans are made on a percentage of your equity in the home, not its worth.

If Habsfan has any sort of other asset or an RRSP he might consider getting some money there by selling it or taking money out.

You're absolutely right.....It is factored on equity. I was suggesting he do this before the refinance with his original numbers but I suppose that wouldn't work either as they'd want to have the house appraised. Sorry, shitty advice on my part. Although a personal line of credit is still an option I guess if the OP's credit is good.....

Steph

 

[Habsfan 64]

It was a high ratio, house was bought for 254K it has been appraised for 240K - real estate 4-6%, they are saying I am 20K short, I bought just b4 recession when houses were high. It was looked at by two different real estate agents in March and at that time it had dropped to 220K since then it has gone up to 240K real estate said we would list at 250K but don't expect to get it.

 

[koreanenvy]

Try Northwood Mortgage. They helped a friend of mine in a similar situation to get 90% mortgaged. If you have a steady job then it should not be a problem .... but if you are unemployed then good luck.

 

[zardoz]

I wouldn't be surprised it drops 50% in 5 years. better to rent than own during this time.