The End of Mortgage Deferral

I said many times, Deferral on the massive basis we have been experiencing had to end

This was a coordinated, organized program that was designed to instantly create calm and stabilize the system

And it worked perfectly, better than expected

2/

With the support of OSFI, CMHC, the private insurers: Genworth and Canada Guaranty, the Bank of Canada and the DoF a solution was developed overnight

Banks and other lenders quickly moved from phone calls and reviewing applications to a Portal that just approved deferral

3/

Up to 5 mortgages deferred

Primary residence and up to 4 rentals

Essentially no questions asked

Some had no income loss and most could easily have continued payments, they were worried or just didn't understand interest compounding

It seemed bad: 20% of all mortgages

4/

It was scary the first 5 weeks of total lock down, Deferral and CERB were key

A version of normal is returning but sectoral unemployment is brutal

Although wide open deferral ends, something else begins

For those who simply cannot pay their mortgages: there are options

5/

If the mortgage was insured the insurers have long established programs to assist the homeowner to pause and catch up

For conventional mortgages: refinance, or extending amortization to reduce payments are real possibilities

Or worse case option: sell the house

6/

In some regions that's a solid solution

But not in all regions and that's really a Canadian tragedy

And the option to sell may be less attractive if currently hot markets cool off next year

My best advice to those worried: ACT QUICKLY

Explore all options QUICKLY

7/

Consult your lender or insurer QUICKLY if payment is impossible and be extremely honest

If you must sell act immediately, if losses look inevitable list anyway and consult an Insolvency professional

It may feel natural to hunker down and hope for a miracle, don't do that: ACT