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Bankruptcy Canada Online Support Group

Consumer Proposals
Welcome to the Consumer Proposals category of the Support Group. Don't want to file bankruptcy? A consumer proposal is an alternative. This is the place for discussions about Consumer Proposals.
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Discussion: Considering CP, what happens with my Mortgage?  (Read 617 times)
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« on: January 06, 2012, 04:58:38 PM »
FamJam
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Hi All, found this support group and I'm so thrilled! I'm considering a CP but I don't want to loose my house if it comes to me being bankrupt! Currently I owe more then it's worth So I shouldn't worry about it happening in the bankruptcy but I do worry about it once it's up for renewal. Can the bank decide they don't want my mortgage? Given my credit history, even though my husbands up to date on the payments? This is my fear!
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« Reply #1 on: January 12, 2012, 06:08:04 PM »
TreeFrog
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Hi FamJam,

You mention that you have a mortgage, but your husband is making the payments. Who owns the house?

Assuming that it is you who owns the house, and you who is making a proposal, everything will likely be OK with the mortgage at renewal time - as long as the mortgage is up to date and the payment history is good. I don't think anyone on this forum has had a bank refuse to renew solely because of a proposal or bankruptcy. In fact, the law is a little foggy about this but it may not be entirely legal for the bank to refuse under these conditions, at least in the case of a proposal. In any case, it's not something that usually happens.

It's not in the bank's interests to dump a mortgage that is making money for them.  Smiley

Hope this helps,
~Wendy
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« Reply #2 on: January 12, 2012, 11:15:33 PM »
FamJam
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That's what I have been told Wendy so I'm not to worried anymore. Thanks! It's a joint mortgage but he pays it as his income is steady. I'm self employed without steady income.
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« Reply #3 on: January 15, 2012, 10:45:57 PM »
AlmostDone
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Our mortgage was needing to be renewed in the middle of the CP. Not a problem at all.
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« Reply #4 on: January 23, 2012, 07:53:52 PM »
bellevalley
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I am in my final year with my CP and was told today from my mortgage company that I may not be able to renew my mortgage.
I had no problem in the past renewing when I was in my second year of the proposal and now all of a sudden they are saying that they have to send it to  private lenders to see if they would renew my mortgage.
I have NEVER missed a mortgage payment or have ever been late with a payment for the last six years with this company and now they are saying that I may lose my home.
I am confused and sick about the situation and don't completely understand it at all.
Sad
I did the consumer proposal in order NOT to lose my home  not to come down to the last ten payments of it and have the rug pulled out from underneath me.
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« Reply #5 on: January 23, 2012, 11:07:32 PM »
TreeFrog
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Hi Bellevalley,

Your situation sounds very unusual. But take heart.

If indeed your mortgage co. won't renew, you should not have to go as far as private lenders to get a new mortgage. In my own case, my mortgage co. withdrew from Canada and stopped doing Canadian renewals at all when I was one-third of the way through my proposal and it was time to renew. Thus I needed a new lender, and I was as worried as you.

My trustee assured me I shouldn't worry, and suggested two local credit unions, and CIBC. I went to see the first credit union, who offered me a new mortgage at their posted rate (no special discounts). Of course I was delighted, so I didn't make inquiries with the other lenders.

I had taken along my records of payment from the 5-year mortgage that was just ending, along with the records of my consumer proposal in good standing (your trustee can help with this if you don't keep good records). I think that helped a lot. For you, since you are almost through your proposal, if a lender is concerned about it they may just be able to fund the payout of the remainder of the proposal and roll it into the mortgage. I believe TD Financial Service offers such a mortgage - but there's no reason other lenders could not do the same.

Gather up your paperwork and shop around. I smell a rat with your current lender.

Best wishes,
~Wendy
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« Reply #6 on: January 24, 2012, 01:04:10 AM »
AlmostDone
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Our mortgage needed renewing in the middle of our CP as well, no problem at all
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« Reply #7 on: January 24, 2012, 12:20:53 PM »
bellevalley
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Thanks Everyone for your information regarding this matter.
I am having a real problem in understanding why it is causing such a fuss because I renewed my mortgage with the same company three years ago and I was only 2 yrs into my CP.
So what they are saying is because I have a second mortgage and the CP, the lenders would want those debts cleared and added to the first mortgage, however, I apparently do not have enough equity in my home for them to approve this transaction and that is why they may not renew my mortgage.  I don't really know where to turn.
I don't want to explain this to my kids ... totally feeling like a big failure.  Sad
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« Reply #8 on: January 24, 2012, 07:59:52 PM »
TreeFrog
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Hi Bellevalley,

Indeed, it's very strange! If your credit was good enough three years ago, it ought to be good enough now, unless something else has changed. Is your lender a company with an office where you can sit down and talk to someone?

If they don't give you a yes, make sure you allow yourself time to find another lender. Approaching a local credit union might be easiest. Since credit unions usually only lend locally, sometimes their lending guidelines allow a little more discretion on the part of the loan officer. In my case, my new lender did NOT insist on rolling the remainder of the CP into the mortgage. Thus I had enough equity for the arrangement we were making.

Best wishes,
~Wendy
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