With the economy in recession and lay-offs on the rise, CMHC has come out with a timely outreach program to help homeowners in danger of defaulting on their mortgages. As the program indicates, all is not lost if you are having financial difficulties. There are solutions other than a rushed sale or foreclosure.
At the first sign of trouble speak to your lender, CMHC advises. With early intervention, cooperation and a well executed plan, you can work together with your lender to find a solution, says Mark McInnis, CMHC Vice-President of Insurance Underwriting, Servicing and Policy.
Mortgage lenders have the tools to help homeowners to deal with temporary financial setbacks. And for mortgages insured by CMHC, the housing agency provides lenders with tools and the flexibility to make timely decisions when helping the distressed homeowner to find a solution. They include:
extending the original repayment period (amortization) in order to lower your monthly mortgage payments
offering a temporary short-term payment deferral — your lender may be prepared to offer greater payment flexibilities, particularly if previous lump sum prepayments have been made, or if you have previously chosen an accelerated payment schedule
converting a variable interest rate mortgage to a fixed interest rate mortgage in order to protect you from a sudden interest rate increase, should one occur
adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period
offering a special payment arrangement unique to your particular financial situation.