Friday, May 18, 2012

CMHC Insurance and Tragedies

There is nothing worse than watching a tragedy in real life, better it be left to the theatre. Nonetheless I couldn't help but notice the site in which a person facing personal bankruptcy comes face to face with what a mortgage, and mortgage insurance, actually is:

I started this blog in the hope of hearing from people who are being raked into bankruptcy or poverty by the concealed  tactics of CMHC when a foreclosure takes place. 
I believe that when a contract is entered into, ALL the terms and conditions should be laid out so that both parties know exactly what is being offered and what the risks are. CMHC does not, and has never revealed to would be home buyers exactly what they do in the event of a foreclosure. this is in fact, a withholding of a material fact, a very important material fact that, I believe should void any contract with CMHC.

And it so continues. In a bout of my own moral weakness I decided, in my curmudgeon-like interests of batting a hornet's nest, I might respond. What follows is my response.

It’s a tragedy, perhaps, that you were allowed to make significant financial decisions with what I can only assume is pages upon pages of paperwork and contracts without obtaining better guidance; in most corporate environments a contract for a multi-hundred-thousand-dollar transaction would be scrutinized for days, the terms and conditions fully understood, and lawyers reviewing the contract for days to ensure there are no gaps. This is all done, most of the time, by people seasoned in the industry and understanding the implications of getting a single clause of a contract wrong. Not so with mortgages. 
Perhaps it is a tragedy that, when asked to sign a document that you did not fully understand, you deferred much of the due diligence to a lawyer who has to second-guess your level of knowledge of mortgage contracts. If you hadn’t any experience with them, perhaps spending a few more hours with him would have cleared up some misunderstandings. 
Perhaps it is a tragedy that friends and family did not countenance caution signing a complicated contract without understanding the obligations it places on you should unforeseen events occur. To that I hope they can all do some navel gazing of the sometimes harsh realities Canada, a free market economy, can mete on those who sign things they don’t understand. 
But above all else perhaps it’s a tragedy that it is considered acceptable for us to borrow vast sums of money multiples of our annual incomes without so much a thought for the “what ifs” if things should sour and asking those who have drafted and understand these contracts the difficult questions, like “So what happens if I miss a payment?”. 
This is other people’s money — not yours — and you should expect to be beheld to their prudent management of their assets, which in this case is a fraction of your earnings every month and superior rights on your other assets should you renege on your obligations. 
I hope your experience can be a lesson to others to understand not everyone — not least the government — is after your best interests, and more importantly not all those close to you are capable of offering you the proper and uncomfortable advice you so desperately needed in retrospect. 


jesse said...

Alas it appears my comment didn't make it out of moderation on the referenced blog. Good thing I copied it before submitting.

FedUpWithU tears a strip off the blog owner in the blog's comments. Ouch. All part of the grieving process I suppose.

Anonymous said...

CMHC business practices should be investigated not because they add some fine print to the agreement but because they insure mortgages that should not have been insured. More at