Up to an estimated 25,000 Canadians may lose their homes–despite making all of their mortgage payments, says the Globe.
A dozen subprime (and former subprime) lenders are now asking for government assistance with the problem. The Globe says these lenders are unable to renew mortgages for higher-risk borrowers because funds for uninsured mortgages have dried up.
The lender lobby apparently wants the government to pony up (or guarantee) lending capital as a result.
While serious enough, this is far from a crisis. It affects a very small percentage of homeowners—many of whom have other options not touched on in the Globe story (like other alternative lenders, private lending, etc.).
The homeowners it does affect are mostly people who have not improved their credit since getting their last subprime mortgage. Many of these folks have dug their own grave. Subprime borrowers must rebuild credit. It’s their obligation. Non-prime mortgages, with their high rates and restrictive terms, are simply not meant for long-term borrowing.
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