In the International Tribune…”When Raymond Zulueta went into default on his mortgage last year, he did what a lot of people do. He worried.
In a declining housing market, he owed more than the house was worth, and his mortgage payments, even on an interest-only loan, had shot up to $2,600, more than he could afford. “I was terrified,” said Zulueta, who services automated teller machines for an armored car company in the San Francisco area.
Then in January he learned about a new company in San Diego called You Walk Away that does just what its name says. For $995, it helps people walk away from their homes, ceding them to the banks in foreclosure.”
Pundits try to overlay the US experience onto the Canadian market. The reality of the Canadian market is in Canada only 0.5% of homes are in foreclosure at any one time. Canadians love their homes and work hard to keep them. The only issue is on the horizon is where home owners refinanced their mortgages at 3.5% and rates are now about 5.35%.
Canadian lenders are also more conservative. The lenders in the US made bad decisions on the basis the paper could be packaged and sold with no consequences.
The Canadian market is expected to be stable with some corrections in market pricing.
Duncan Seward is an experienced mortgage broker in bc who is an expert in home mortgage refinancing and second mortgage loan origination.
