CMHC debt from foreclosed home
September 3rd, 2009 by Questions
When CMHC covers the bank for the shortfall amount on a foreclosed home, CMHC will become my debtor with the entire unsecured shortfall amount. Isn`t the point of insurance is to cover me? It would make more sense if CMHC comes after me for the amount of premium unpaid and not the entire shortfall unless they give my premium money back. Why would the entire amount be my debt?
Posted from: Alberta
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September 04, 2009 at 9:15 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
You are correct on how CMHC operates, you are responsible for the shortfall and will have to make arrangements with CMHC to make payments on this shortfall. What you are mistaken on is the notion of insurance, CMHC is not insurance for you. It is insurance for the bank. In an effort to increase the availability of mortgages for consumers the are protecting the bank from a loss so they will be willing to lend more frequently.