The New Normal? Economic Prespective from one of Canada’s Top Economists

By Alberta Foreclosure Info

I was fortunate enough to catch Benjamin Tal’s presentation in Calgary recently, presented by our friends at FirstLine Mortgage, as he discussed what he calls ‘The New Normal’. For those of you unfamiliar with Benjamin Tal, he is the Deputy Chief Economist for CIBC World Markets. As usual, Ben delivered an engaging and entertaining discussion about world events and their direct impact on the national and local economies. It really is quite remarkable how Ben can make economics seem like so much fun!

As a mortgage associate with Verico MyMortgage.ca, I am particularly interested in Ben’s forecasts of upcoming bond markets and Bank of Canada decisions, as well as his prognosis of the real estate market. He always delivers a terrific amount of information and value every time he speaks.

Although he discussed several issues ranging from oil price shocks, the deleveraging US consumer, pending Fed and Bank of Canada decisions and the booming (?) US manufacturing sector, the most important message he left us with was the impact of a rogue fundamental economic indicator, the ‘Velocity of Money’.

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Your Personal Liability In An Alberta Foreclosure

By Harold

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

By Alberta Foreclosure Info

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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