mortgage
if i choose to walk away from my house,can cmhc still come after me if there is a loss on the house after they sell it?i was informed it could be included in a proposal and i was also told that after i am finished with my proposal cmhc then could come after me
Posted from: Ontario
If you “walk away” from your house and then file either a proposal or bankruptcy, then any shortfall on the sale will be included in the proposal or bankruptcy.
The problem you may have to deal with is the fact that it may take some time for the house to sell and then even longer for CHMC to come looking for you. Undoubtedly, they will contact you some YEARS later demanding payment. When that happens you will have to provide proof of the proposal or bankruptcy and the fact that CMHC was notified of the procedure when it happened. If the shortfall from the house wasn’t quantified at the time of the proposal then CMHC may be entitled to the same rate of repayment that your other creditors received.
So, BEFORE you decide to “walk away” from your house, discuss all of this with a trustee to make sure you understand all of the implications.