tag:blogger.com,1999:blog-5936637281134795592.post4883335571737892959..comments2024-03-08T08:55:52.985-08:00Comments on Whispers from the Edge of the Rainforest: Sat Post #1: Foreclosure Process in British ColumbiaUnknownnoreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5936637281134795592.post-16556423369187901972016-10-18T21:05:58.256-07:002016-10-18T21:05:58.256-07:00Can CMHC not recoupe some of their losses, and go ...Can CMHC not recoupe some of their losses, and go after the borrower who defaulted, I know squeezing water from a rock is a waste of time, but it may be worth the cost to persue some of the people who default and recoup some losses, this would also deter others from just sort of walking away from mortgages.Troyhttps://www.blogger.com/profile/03426643816958396147noreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-52290295679287029452011-12-31T12:17:35.493-08:002011-12-31T12:17:35.493-08:00I hear what you are saying that the logical respon...I hear what you are saying that the logical response to lack of fair market bids is to lower the amount deemed to be fair market, but seriously. Bureaucracies often fail logic. I work for one, though it is not related to housing policy. If we ask the question "who benefits?" from lowered property values, we may find a remarkable lack of incentive for reforming our inefficient foreclosure process. The process does not only protect hapless mortgage defaulters. It serves to prevent foreclosure sales from making the market. This benefits existing homeowners, banks/investors who hold mortgage portfolios, the CMHC that would have to pay out way more money than it has, politicians who would look bad explaining their failed policies... Anyone else?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-18152863696150722402011-12-31T11:39:10.409-08:002011-12-31T11:39:10.409-08:00The rules seemed to be designed to protect the hom...The rules seemed to be designed to protect the homeowner against being victimized by the mortgage holder (and the realtor appointed by the mortgage holder) who may not adequately try and obtain the "best price" for the property.<br /><br />That's why the judge can refuse to accept an offer for the house.<br /><br />I suspect that when foreclosures dramatically increase, and the courts have rejected a number of offers for properties and those properties return with even lower bids, you will see the arbitrary "fair market value" standard lowered dramatically.Whispererhttps://www.blogger.com/profile/03524022285962626228noreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-60363412271038139262011-12-31T10:59:56.871-08:002011-12-31T10:59:56.871-08:00This piece does not mention the possibility of the...This piece does not mention the possibility of the judge finding that the highest bid is not high enough. It also fails to address the elephant in the room, which is CMHC insurance. What does it mean for the lender and purchaser to negotiate a price when the lender is fully insured against loss? Is the CMHC involved in this negotiation process? If so, the whole concept of mortgage insurance might come to resemble credit default swaps on Greek sovereign debt: Of course your risk of capital loss from sovereign (mortgage) default is fully insured. All that needs to happen is the minor detail of the ISDA (CMHC) agreeing that the default event was not voluntary (accepting that the property is sold for fair market value). As soon as we satisfy that condition, your losses will be paid in full.<br /><br />I'm not saying this is how it will go down. I have no idea how the system works, or is designed to work, in a market downturn. I suspect that nobody really does.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-54107724166698378102011-12-31T10:43:49.026-08:002011-12-31T10:43:49.026-08:00I have a feeling that a lot of foreclosure propert...I have a feeling that a lot of foreclosure properties here will sit completely bidless. It will be interesting to see how the torrens system will handle ownership issues in a collapsing RE market. I have a feeling we will emerge from this with a completely new set of property laws here in Canada. The property laws we have now are very weak, and if we get into a foreclosure mess that will be made glaringly obvious.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-87802345450509269612011-12-31T00:23:09.079-08:002011-12-31T00:23:09.079-08:00What will be interesting to watch is whether a fal...What will be interesting to watch is whether a falling market combined with a rash of foreclosures impacts the determination of "fair market value" by the courts.Whispererhttps://www.blogger.com/profile/03524022285962626228noreply@blogger.com