Foreclosure

March 9th, 2011 by Questions

I have read some of your responses to the foreclosure questions asked by others and am still a little confused, I obviously do not know all the facts. If my property does go into foreclosure and since I did pay for CMHC, which should cover the amount owing after the auction/sale of my property. Why would I be responsible for that cost to CMHC. I paid them to cover the bank, if anything, shouldn’t I be responsible for any amount owing on the insurance?
Thanks,

Michael

Posted from: Alberta

Questions

One Response to “Foreclosure”



, A licensed trustee said:

When you buy/pay for CMHC insurance on your mortgage it is for the benefit of the mortgage company – not you. If your home is sold at a loss such that the mortage company is not repaid in full, they apply to CMHC for the difference – that is what the insurance is for. CMHC then has a right to come after you for whatever amount they had to pay the mortgage company. It’s not fair, but that is how it works.

You can avoid all of this by waiting to buy a home until you can put 20% down – this is called a conventional mortgage and does not require CMHC insurance.

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