An insured mortgage by CHMC or NHA is where you paid less than 25% as a down-payment on the purchase of your home. This is not the case if you hold a mortgage that is insured by CHMC (Canada Mortgage and Housing Corporation or NHA (the National Housing Act).
If you hold a conventional mortgage, the lender cannot both take the property and sue you for the outstanding balance. A conventional mortgage is where the mortgage amount is less than 75% of the value of the home. It depends upon the type of mortgage that you hold. Generally a bank or lender cannot both take your property and sue you for the balance still owed. To find out what encumbrances are registered against your property, a copy of the title of your home is available from any Alberta Registries outlet. You should discharge any registered financial interests on your home before you ask the Bank or lender to agree to a Quit Claim. The lender may not agree to a Quit Claim in these circumstances. If the lender takes the home, all financial registrations made against the home will transfer with title to the lender. These financial registrations may add up to more than the value of the home. For example, you may have third party interests such as other mortgages, encumbrances or liens registered against the home. The lender will not agree to your offer of a Quit Claim if you have no equity in your home. It is less expensive than an action for foreclosure as the legal fees are lower and expenses such as appraisals, advertising, and service costs are avoided. Sometimes it takes up to 1 year for the foreclosure proceedings to end. The lender may agree to a Quit Claim because it is quicker than the time it takes to foreclose on your property. If you do not respond appropriately, you could lose your home, your credit rating, and your peace of mind.Ī Quit Claims involves less cost and time for both parties.
Foreclosure on your property is more serious. You may want to consider these alternatives instead of being forced into foreclosure proceedings by the lender. Where you have some equity in your home and you cannot make the necessary payment, you may want to sell your home if the property is worth more than the debt owed. The lender agrees to cancel the debt against the borrower and the borrower agrees to give up the property to the lender. Quit claims are signed agreements made between the lender and the borrower to relinquish certain claims to the other. If you find yourself in this situation where you cannot meet your obligations under the mortgage, you may want to offer a Quit Claim to the lender. If you fail to do any of these things, it is said you are “in default” under the mortgage. When you take out a mortgage from a Bank or lender, you agree to do certain things: make your payments against the mortgage, keep the property insured, and keep the taxes paid.
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