Troubles of Canadian “orphaned” homeowners

December 9, 2009

Troubles of Canadian orphaned
homeowners by Felipe
photo de Moura Vieira

"Unfair" is the word used by many to describe the state many homeowners are in at the moment. To be exact, this situation only concerns those borrowers, who did not qualify to be financed by traditional lenders. Their alternative sources of finance, the so called orphaned mortgage companies are causing them trouble.

A huge number of mortgages by such companies was issued during the real estate boom almost three years ago. Due to the credit crunch, nearly half of them will not be renewed, no matter how well and regularly the borrowers paid their loans.

Lenders are thus requesting a special billion-dollar fund from a federal government. The fund should renew the healthy mortgages of borrowers who could not afford loans from a bank. However, the officials from the Finance Department are sceptical and question the the estimates of the lenders.

The situations seems to be quite complicated and its turnout will surely be interesting – we will have to wait and see. Anyway, best of luck to the homeowners!

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