Recession Mortgage Blues?


Times are tough right now for some — and many Canadians are feeling the pinch. If you’ve recently found yourself in a financial position that could prevent you from making your mortgage payments, it’s important to know that there are resources available to help you.

Canada’s lenders and mortgage default insurers have recently ramped up their efforts to assist homeowners. If you think you might be on the brink of missing a mortgage payment, it’s best to contact your lender right away.

Some of the mortgage default insurers have expanded their home ownership assistance programs to assist homeowners in financial trouble. Mortgage default insurance protects lenders from defaults on high ratio mortgages (or mortgages with less than a 20% down payment).

Genworth Financial Canada has recently launched an online tool as part of its Homeowner Assistance Program that identifies solutions for homeowners who are, or might be, facing financial hardship. The tool asks a variety of questions, including “What is the main reason behind your financial difficulty?” and “Are you currently receiving EI?”. The program then comes up with a variety of options available to you, that include:

Capitalize Arrears — an option that provides temporary relief with the understanding that the amount owed will be added to the principal mortgage balance and repaid at a future date;

Increase Amortization — this depends on the current amortization schedule of the mortgage. If there’s room for it to be lengthened, this will decrease the monthly mortgage payments;

Partial or Shared Payment Plan — if you can afford part of your monthly payment but not all of it, Genworth will temporarily pay the difference to the lender with the understanding that the homeowner will repay that amount at a later date.

The goal of the program is to help homeowners through temporary financial difficulties — it’s not meant for individuals who chronically miss their mortgage payments.

In addition, homeowners must have a mortgage insured by Genworth, although other insurers, CMHC and AIG, offer similar programs. If you’re uncertain as to who insures your mortgage, or if you placed a down payment of more than 20%, it’s best to contact your lender before you fall too far behind in your payments.

Canada’s Office of Consumer Affairs also has useful information on managing your debts. Visit for more information

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