Getting a Mortgage Post-Credit Disaster

Credit-recoverySome folks spend their way into bankruptcy. Others become insolvent due to unavoidable personal crises.

Either way, everyone deserves a second chance at good credit, and a chance to be a responsible homeowner.

This week’s Globe column looks at how people can get back on their feet and position themselves for a mortgage. We’ll follow up with a post tomorrow outlining additional tips for the credit-challenged.

Story Link…

  1. In a lot of cases hard working families see their credit nosedive because they fall behind on payments through no fault of their own: job disappears overnight, husband deserts leaving wife with all the debts or perhaps a workplace injury. The article is so right on how location can affect a person’s ability to get even an equity takeout mortgage. Even equity lenders are hard to convince when there is a well and septic. Their rationale is that it would be very hard to sell the home, if they repossessed, due to location. How to convince lenders to give them a break is very difficult even if they are working steadily.
    Others listen to those ads advising them to do a consumer proposal to solve all their financial problems. What they don’t realize or are not told is what effect this will have on them down the road when they try to get a mortgage.

  2. Agreed. We seem to be helping a whole lot of people going into foreclosure these days and despite it being the business I’m in. . . I’m sad to see a lot of folks just under water due to circumstances.
    I’d like to think things will improve in this aspect. . but it’s not looking hopeful :(

  3. Rob congrats on the good post and the related Globe and Mail. With many years of sub prime lending experience overall I agree with the comments in the articles but question what is the plan for those that do not have at least 25% available equity coming out of an insolvency? The insurers have dramatically “tightened up” on these borrowers and generally these “B” mortgages do not report to the bureaus to help rebuild credit. Some brokers in online forums suggest “rent to own” but in my opinion these RTO programs can be very expensive and provide no guarantee that the borrower will quaify for a high ratio insured mortgage at maturity. Together with a regulated financial institution, our team at Debt Coach Canada created an alternative solution to help our members in Ontario post insolvency improve their finances so they can eventually qualify for an insured mortgage once they have completed our program. An intro video is at http://www.creditbuilderplus.ca

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