11 Common Reason People Go Into Foreclosure in Canada
We love to help people get out of foreclosure on their homes, and there are 9 common reasons people go into foreclosure.
It is not the same for everyone, every circumstance is different. The one common thing about going into foreclosure is that it is a really shitty feeling. People tend to feel distressed and lost when they go into foreclosure, it is important to get the right type of advice or you can get sucked into paying massive penalties.
I have seen time and time again, financial institutions taking advantage of people that are under foreclosure. They will sell their properties from underneath them, and charge them massive fees until there is literally no equity left. They make the home owner responsible for everything including legal fees and more.
I am here to tell you this….there are better options for you. I am writing a series of articles about foreclosures and B lenders so that you can understand the ins and outs of the process, as well as the potential risks there are in the foreclosure process.
We know that you are not bad people, and that circumstances can push almost anyone into foreclosure. Our goal is to help you stay in your home and pay it off as you probably planned for originally anyways.
Edmonton and other areas in Canada have been under stresses in the real estate market, coming from all over the world. We are dealing with inflated prices due to foreign investment, oil patch problems, trade disputes and outside government sanctions. This can be really stressful and put many people in financial hardship.
Not only is it directly affecting our pockets, but it is also affecting our healths and relationships.
In most foreclosure situations here, it is not because the home owners are dumb or irresponsible. They are just affected poorly, and it can happen to any of us including myself.
When I was very young, my family went through the foreclosure process because of a really bad divorce. That is why we want to be your foreclosure support. I am willing to give free foreclosure advice to any of you that want to talk.
Now that being said, I am not a foreclosure lawyer or trustee. I am a mortgage broker that specializes in foreclosures. Please let me know if I can help in any way. My contact information, as well as some links to other foreclosure articles are below.
11 Common Reasons People Go Into Foreclosure in Canada
This is one of the most common reasons people in Canada go into foreclosure. I work currently in the Edmonton market, however I serve people Canada wide. In my market alone there are hundreds of foreclosures every year because of divorce.
Sometimes during a bad divorce, accountability is passed on to the other partner and vice versa and the bills just don’t get paid. If you miss several payments, the banks will put you in foreclosure and this is very hard to repair.
2. Job Loss
The oil sands are running at low volume at the moment and a lot of people have lost their jobs in Canada. Large companies are starting to outsource a lot of their products to foreign countries and some countries are not trading at as high of volumes with Canada.
This has put a lot of people out of work…yeah it sucks. On the bright side, we do have lenders that consider this, and will work with you to not only help you get out of foreclosure, but also to help you get a job….believe it or not. Ask me how.
3. Military Relocation
When a person has had consistent spending habits for years, and they are relocated to a market like Edmonton, Vancouver, Calgary or Toronto. Their cost of living will go up. Some people forget to take this into account, and end up in foreclosure.
We may be able to take out some money from your current mortgage to pay off high interest loans, so that you can get back on track.
4. High Student Loan Debt
The great thing about student loans is that you don’t have to pay them for a few years and during your schooling. The old mortgage rules allowed banks to not have to consider someones student loans in their debts if there is no payment. Now they do. But all these people who qualified years ago, do not qualify now.
Some of you in this situation, may have a bank or lender that will not renew the mortgage. You need to port that mortgage or (switch) to another lender.
5. Buying too many Toys
I live in Edmonton, Alberta close to the oil sands. A lot of people made a lot of money many years ago and chose to buy high end vehicles mixed with trailers, motorcycles and more. Their payments are really high and now that the jobs are not as abundant and pay less, they can’t make their payments.
If you are in this situation, you need to consolidate before it is too late. We can pull some money from the house at low interest and pay off some high interest debt.
6. Depression and Anxiety
You never know who has depression or anxiety. But when this happens, people tend to operate at a much lower level. You can read more about anxiety here.
Some people just want to sleep and will call in sick often to work. Eventually their workplaces catch on and they end the employment. If you are in this situation, don’t let yourself get behind.
You need to get help. I can try to make your payments lower for you by extending the amortization. I may also be able to get you one year worth of payments paid ahead of time and build into a second mortgage. Ask me about these kinds of details. I just did one for a lady in distress.
Yes people do this all the time. Often it happens with people that are new to credit. They spend too much initially and before they know it they are drowning in debt. We can try to pull money out of the house in this case to pay things down.
If you become ill the last thing on your mind is paying the mortgage. Many lenders have programs/insurance for this. You may have this insurance already and not even know it!
9. Buying at the wrong time
If you bought at a high time and then find yourself in a tough financial situation, you cannot sell the house because there is not enough equity. You will just have to pay the bills. We may be able to refinance it and make your payments smaller.
10. Substance abuse
Drugs and alcohol are a major factor in why some people loose their homes in Edmonton to foreclosure. This is happening all over Canada. I had a young man that inherited a home from his grandparents. He ended up getting all kinds of loans on the house to fuel his party habits and ended up loosing the house.
11. Death and Probate
This is another distress situation and the reason why I always suggest that people get mortgage life insurance. If someone dies and they are the main income earner, you could go into foreclosure. As a matter of fact even if you are the main income earner, and your spouse or child dies. You may go into depression and avoid making money.
Sean and Radika Rampersaud are a family team of Edmonton mortgage brokers. They specialize on helping their clients to get the lowest mortgage rates in Canada by leveraging high volume and multiple lenders. “We want to help our clients not only to get the best rates, but also to make the home buying process easier.”