Helping Homeowners Through The Foreclosure Process

Alberta Foreclosure Help

Core Values and the Foreclosure Game

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Just when you think you’ve got the Alberta foreclosure process all figured out, a curveball lands you square in the face.

In Alberta, the foreclosure process affords the homeowner the flexibility of time by honouring a suitable redemption period when it is deemed that equity resides in the subject property at the time of default. Knowing that he had substantial equity in his property, Roger was confident that he had time on his side. He was busy creating solutions that would help him payback all his outstanding arrears when, surprisingly, the Foreclosure hearing judge pulled the plug and called it quits on his noble and just plans.

To me, this story exemplifies the benefits of living from your core values.

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Your Personal Liability In An Alberta Foreclosure

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Personal liability in an Alberta foreclosure

Understanding Your Personal Liability In An Alberta Foreclosure

Your personal liability in an Alberta foreclosure refers to any money you may owe the lender if the property being foreclosed on is worth less than what it ends up being sold for. With the price of homes and the down market, this can be serious business and you need to understand the potential consequences you’re facing.

When it comes to your personal liability in an Alberta foreclosure, you need to start by determining what type of mortgage you have in place as this can help you understand how much of any shortfall you may be responsible for.

Once you know this, you’ll have a clearer idea of  how much you could be on the hook for with any outstanding debt you may owe your mortgage lender and even how you can move forward. So let’s start by breaking down the two most common types of mortgages in Alberta.

If you were fortunate enough to obtain a Conventional Mortgage (defined as a mortgage based on a downpayment equal to or more than 20% of the purchase price), and you live in Alberta, the lenders only remedy in the case of a defaulting borrower is to foreclose and sell the house. If there is not enough to pay the mortgage, (known as the “deficiency”), then the lender is out of luck.

On the other hand, if you have a High-Ratio Mortgage (defined as a mortgage based on a downpayment amount of less of than 20% of the purchase price), that mortgage is most likely insured by one of three Canadian mortgage insurers; Canada Mortgage and Housing Corporation (CMHC), Genworth Canada or Canada Guaranty. When a mortgage goes into default, and the debts can’t be repaid from sale proceeds, then your personal liability in an Alberta foreclosure can be much higher!
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Credit Counselling Caution

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Credit Counselling

Even a passive observer knows that consumer debt levels in Canada have reached record highs. StatsCan recently reported the ratio of household debt to disposable income to be 1.48, exceeding US household debt levels for the first time in over 12 years. If this disturbs you, it should.

Personal bankruptcies and property foreclosures are a common artifact of recessions. Reported bankruptcies and foreclosures have been on the rise since the recession took hold in Canada, and more people are turning to debt solution companies to help them solve their debt woes. In Canada, someone wishing debt relief can declare ‘bankruptcy’ or obtain a ‘consumer proposal’. In either case, you need a trustee to accomplish this.
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