Should you walk away from your Alberta mortgage?

southseacompany pointed out this article in the Financial Post:

You can walk away from your mortgage (if you live in Alberta) but should you?

“Francis, a 34-year-old welder from the mining town of Grande Cache, Alberta, says he wishes he could get out of the townhouse he bought four years ago.”

“He bought the home for $175,000 with a five per cent downpayment but still owes $150,000 on his mortgage. He says the market for his home has collapsed in his town and a realtor just told him the best price he could expect is $75,000.”

“Since the loan is “under water,” his bank would be left with a shortfall that CMHC would have to cover. The Crown corporation would likely sue him for any losses it has to cover, so if he has any assets, CMHC will go after him.”

“Handing over the keys to the house and walking away from your mortgage, called “jingle mail,” was a defining act of the American housing crisis and helped send the market south of the border into a deeper tailspin.”

Interesting theory, but as we actually saw in the US states with recourse loans (i.e. Nevada, Florida) saw just as much of a collapse as non-recourse states.

65 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
space_cadet888
space_cadet888
5 years ago
Fold
Fold
5 years ago

@60
If you have evidence of any criminal activities in Canada, report to the authorities and bring these “Scumbags” to jutice. Does it make you feel better by accusing every Chinese person who’s wealthier than you as having only “stolen money”?

vangrl
vangrl
5 years ago

Don’t ya hate when you’re having a conversation and admin just starts a new post. so rude 🙂

vangrl
vangrl
5 years ago

If we could cut out a good portion of foreign investment, then all we have left are locals, & locals can easily be controlled with a 2% rate hike.

Best place on meth
Best place on meth
5 years ago

If extra taxes on foreigners don’t slow them down then obviously the taxes aren’t high enough.

Keep raising them until they’re 100% of the purchase price.

Hey Mr. Corrupt Chinese Scumbag, that $3 million pricetag is now $6 million. Still want to buy?

Of course you do, you don’t care. It’s stolen money anyway.

Keep raising then.

Wearehere
Wearehere
5 years ago

From what I remember Patriotz says the Mainland Chinese are not a factor. Now he says you can’t stop them buying even if they are.

vangrl
vangrl
5 years ago

#57 I think Patriotz is right when he says that foreign restrictions haven’t helped other countries, but that doesn’t mean that it’s impossible to figure out how to set regulations that would work. It appears that Hong Kong’s extra taxes did slow down mainland chinese buyers, it’s roughly 10% of the high-end market now instead of 30-40%. That’s a pretty big difference, if that were to happen here it would surely have an impact on our high-end market. I like your #1,2 & 4, but not #3, only because 1 million doesn’t feel at all like a ‘luxury’ property any more, but rather a low-end house in most parts of Van. Also, I don’t really think that those that can afford really expensive houses should be penalized,they already pay more property taxes & probably a crap load of income tax… Read more »

w
w
5 years ago

It seems the Chinese have taken over the comment section too. Seems appropriate, since this is VANCOUVERcondo.info after all.

Bear Vancouverite
Bear Vancouverite
5 years ago

@Fold posted a very important post in the last Friday Free for all that many have miss. Here is a link to his post: http://vancouvercondo.info/2015/05/friday-free-for-all-245.html#comment-254749 Here’s the most interesting part: “Hong Kong real estate market is much more unaffordable than Vancouver. We used to blame it on Mainland buyers. 5 years ago our government issued restrictions on non-local buyers with an extra 15% stamp duties on top of a 8.5% max stanard rate. That’s as much as 23.5% of stamp duties for foreign buyers! Selling a property within 2 or 3 years from possession will also trigger an extra 10 to 20% of special levy on selling price, regardless if the seller is making a profit from the sales or not, local or foreign. Guess what? Real estate prices just keep shooting up despite much less participation of Mainland buyers.”… Read more »

flaneur
flaneur
5 years ago

@45, Yunak, do you mean to say a forensiic pathologist who deals with corpses?
That BP house may be auctioned off soon at 50% of its market value. No one with the “888” mindset will touch it now. 🙁

Fold
Fold
5 years ago

@53
Isn’t this forum filled with “disgusting, misogynistic comment” on Maindland Chinese?

Kim
Kim
5 years ago

Administration,

space889 should be banned from this site due to his disgusting, misogynistic comment #51

His ridiculousness just crossed the line.

space889
space889
5 years ago

@BBB – Sheesh….

Paul Bernardo cut his victims into what 5 or 6 pieces, encased in concrete and dumped into river/lake, and RETURNED unused concrete to the store! Talk about being cheap!

Robert Pickerton grinded up some of his victims and sold/gave the meat as ground pork to his friends/customers.

What a bunch of sickos white Canadians can be.

space889
space889
5 years ago

– For someone who hates mainlanders so much, why the hell are you reading a mainlander forum?? Geez…

I guess it’s true what I learned in Pysc 100, those who are projected the most hatred of something publically are actually the ones who actually partakes the most in those activities.

Maybe you actually benefits from all those corruption money and really wants to be a corrupt official’s white girl mistress and have luxury goods, diamonds and $$$ showered on you. Yet whenever you look at yourself in the mirror, you can’t escape that sense of shame. That’s why you hate the mainlanders so much? You hate that deep down, despite all your moral objections, you still want to be their whore for the $$ and high life?

paulb
5 years ago

New Listings 287
Price Changes 76
Sold Listings 220
TI:13178

http://www.paulboenisch.com

space889
space889
5 years ago

@Yunak – If Canada cared then those people wouldn’t be let into the country in the first place. The only reason they are here is precisely cuz Canada treasure the $$$ much much much higher than any sense of ethics, morals, fairness, etc. They might talk the good talk but in the end they are no different from the corrupt officials. The only reason that Canada signed the treaty with China is because China caved in and will share the spoils with Canada 50/50. In Canada truely cared about things like justice they would have helped in the investigation without demanding such a huge cut. But then what do you expect from a country that still exports abestos, a banned substance in Canada, to 3rd world countries where they know workers & home owners wouldn’t have the proper training or… Read more »

space889
space889
5 years ago

– So basically we have a family leaving a home vacant, taking away supply, and earning income in China which they likely wouldn’t report to CRA.

Hmmm….I smell a bloody outrage here. Maybe you can post the address so team BPOM can go there and give the absentee owners a piece of their mind and a massage that their kind aren’t welcome here? 🙂

space889
space889
5 years ago

– Ownership cost would only fall as a percentage of income if property prices stayed constant. If price increase kept pace with rate decrease then the ownership cost would stay roughly the same.

However, in a bubble, people tend to buy bigger and more expensive and use more leverage for more gains as prices increases at an increasing pace (dollar or percentage wise). So I would say what you found indicates presence of a bubble more than foreign ownership.

After all, if you are convinced that price increase will continue, would you invest smaller amount of money into cheaper properties? Or more likely borrow your brains out and buy the biggest and most expensive property you can get for more gains?

Yunak
Yunak
5 years ago

@42 & 44

Possibly Li Zhao was a prominent surgeon back in China given the cutting skills. He recently retired afluent West Van gated community to write books and continue scientific research.

Bull! Bull! Bull!
Bull! Bull! Bull!
5 years ago
vangrl
vangrl
5 years ago

“Well Kept Shaughnessy Mansion sits on a 72 x 127 big lot, completely renovated to its highest standard. This beautiful CHARACTER HOME simply offers hardwood floors thru-out, 6 generous sized bedrooms & den, solarium, entertaining sized open large gourmet kitchen with top of the line appliances, granite countertop, hot water heating system. Private PARK-LIKE GARDEN, secured fenced yard. Close to Vancouver College, St George’s, Eric Hamber, UBC, shopping, transit…”

http://www.westca.com/House/housedetail/houseid=4408/lang=schinese.html

Status – DEMOLISHED

Fold
Fold
5 years ago

We clearly know the way they moved their money into Canada may not be legal in China’s jurisdiction, but as far as the operation within Canadian territory is concerned, can anyone say it’s illeagl? Guys, you just hate them so much that whatever they made at home is dirty money?

crabman
crabman
5 years ago

For all the anecdotal evidence that Chinese money is driving up prices in Vancouver, there has been very little data to support the idea. Ian Young is one of the only people so far to come up with something we can hang our hats on. Recently, I’ve been crunching some numbers from the REBGV Stats Packages, and think I’ve found pretty compelling evidence.

Check out the pre-2009 and post-2009 scatter plots. The first demonstrates locals borrowing their brains out, the second clearly shows a market driven from the top.

https://vancouverflippersintrouble.wordpress.com/2015/05/05/mystery-solved/

patriotz
5 years ago

@29:

Singapore, Sydney and London have imposed foreign buying restrictions.

Neither Sydney nor London have the power to impose any restrictions on RE ownership. Also there are actually two of each, namely the core city (which in the case of London is only a square mile), and the metro authority.