Alberta Mortgage Law

[mazdavirgin]

Does anyone have a copy of the alberta mortgage legal agreement? I am specifically looking for information as to when the law was changed to allow the bank to pursue the borrower for the difference between the foreclosed price and the original mortgage amount even when the mortgage is insured. Anyone have any insight as to when and why this was added? As far as I know this is limited to Alberta is it not? :dunno:

[bg_27]

From my research and understanding of the research, its not necessarily the law that allows them to sue you, its your agreement you signed for the mortgage, more importantly the agreement with the insurer (CMHC, Genworth, etc.). Its not the lender/bank that sues you, its the insurer. Basically you entered a contract with the insurer that agrees to allow them to recover the deficiency.

Once the property sells, the bank will make a claim with CMHC (as an example) for the difference between the sale price and the mortgage amount and ALL fees associated with the foreclosure process.

CMHC will then reimburse the bank for the claim.

CMHC will then sue you for the deficiency. They will not sue for the fees with the process.

[BoostinAround]

This is only in Alberta, and you cannot have any CMHC on the property.

[crewchaud]

Just curious what recourse CHMC has to recover the difference.

My friend is in this exact situation. He has no assets and is in debt about $45K. In a nutshell, he has nothing to give CHMC and CHMC can't take anything (assets that is).

:dunno:

[broken_legs]

Sooooooooo

Basically CMHC is a rip off for the Consumer.

The consumer is paying the banks insurance cost, so the bank literally accepts ZERO RISK.

The consumer is stuck with the bill of the cost of insurance AND actually paying the claim on the insurance.

Sounds like pretty crappy insurance to me.

EDIT:

Oh yeah I forgot

If CMHC is losing money to too many bad loans, then the consumer has to pay again through government bailouts.

what a great system