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Email this8:39 am
April 6, 2013
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An interesting fact about mortgages in Alberta from CBC (Calgary): Jingle mail rears its ugly head in Alberta again:
Alberta is the only Canadian province to broadly offer non-recourse residential mortgages. Those are loans with at least a 20 per cent down payment and thus are not insured by the Canada Mortgage and Housing Corporation (CMHC).
If you walk away, you lose your home, but otherwise have no personal liability. Elsewhere in Canada, your lender can take you to court and seize other assets, such as RRSPs, vehicles, and even garnishee your wages.
11:37 am
January 18, 2016
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I remember those wild times in Calgary. Too bad I was still young, foolish and partying way too hard. You could buy all the houses you wanted for a song.
11:53 am
September 11, 2013
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Norman1, I always used to wonder why every time oil and gas took a tumble you'd hear of Albertans leaving the house keys on the table for the bank and then leaving to go back home east or wherever they came from. I used to wonder how that would help, you'd still owe the mortgage balance I thought, until I discovered the special case in Alberta you cite above. In my lifetime this has been going every time boom's gone to bust in that province. And if indeed this time carbon-based energy is largely staying in the ground then maybe there will be lots of cheap housing inventory available in Alberta held by the banks, who presumably just want to recover the remaining mortgage balance.
8:53 pm
October 21, 2013
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"Rent-to-disown" is what I'd call it.
BC: Take note.
7:24 pm
April 6, 2013
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Bill said
Norman1, I always used to wonder why every time oil and gas took a tumble you'd hear of Albertans leaving the house keys on the table for the bank and then leaving to go back home east or wherever they came from. I used to wonder how that would help, you'd still owe the mortgage balance I thought, until I discovered the special case in Alberta you cite above. ....
Glad I could solve that mystery for you!
The money is still owed to the mortgage lender. Just the lender cannot take any further legal action, beyond foreclosure, to recover the money.
A "strategic default" is still a mortgage default and will show on the borrower's credit history as such. The same CBC (Calgary) article has this to say:
The one main difference between now and the 1980s is that now credit bureaus have access to mortgage information. If you make a strategic default, it will follow you.
"You're going to have a big black mark on your credit bureau for the next six to seven years" said Dan Heon, a broker with the Canadian Mortgage Team. "So just handing the keys back and saying, 'I'm going to move to Saskatchewan where the jobs are,' and think that you're going to start your life up again and borrow money, it isn't going to happen."
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