March 17th, 2009 by Questions
I filed a consumer proposal a month ago. Today I received a letter from my mortgage company (GMAC) stating that because I have filed a proposal, my mortgage is now `in a default condition`, and, as such, they have the right to demand payment in full immediately.
They further write that they will waive this right if I send back a signed and witnessed re-confirmation of my obligations to them (this was included with the letter), and pay them an `administraive charge` of $150.
My payment history is perfect, and I expect it to continue so. My trustee says it is not, in fact, legal in Canada for them to cancel my mortgage just for filing a proposal, so their threat is empty (although I will be happy to return the signed paperwork, and will pay the $150 fee just to keep out of trouble).
Further, my trustee says that at my renewal time in 2 years, it may in fact be illegal for them to refuse to renew simply because there has been a proposal. I hope this is the case, but I have been worried about it, as I intend to live here for the rest of my life.
Do many of your clients experience what I have experienced? What are your views on the legalities?
Posted from: Ontario