This is a special guest post brought to us by Mr. Teague Brinkworth, AMP, in Kamloops BC. As broker-owner at Mortgage West, Teague has a wealth of industry knowledge and experience and has personally worked with many clients who are currently affected by the ongoing tragedy of the forest fire in Fort McMurray.
The Fort McMurray Fire and Your MortgageYou never think about what you’ll do if you are forced to leave your home, belongings, and community to live elsewhere for an undetermined period of time. With the recent wildfires in Fort McMurray and destruction in Fort McMurray, this is reality for many.
In an effort to help out the amazing people I’ve met through working in Fort Mac, I’ve compiled a list of contact numbers for some of the lenders out there as well as some of the actions they are taking or what they are allowing in order to help their borrowers navigate this emotional and financially draining time.
Here are the first steps to take:1. Contact your insurance company (the policy holder) - you may be able to get a lump sum up front to cover living and mortgage costs without filing a claim.
2. Contact your lender directly as they are aware of your situation and are currently setting up 1-800 numbers in order to handle your calls.
I’ve attached the list of some lenders, their contact numbers and will post it to Facebook through Mortgage West’s Page. In the meantime, as I do with my clients, I will explain loosely how the system works and then with that explain how to navigate the process with your bank or financial institution.
1. You “the borrower”
2. The Lender
3. The Insurer
If you put less than 20% of the purchase price as a down payment, your mortgage is insured (3). This insurance protects the lender from losing money if (you) the borrower doesn’t pay.
The lender is the client of the Insurer. This means that any policies or concessions the insurer makes, the lender is allowed to do the same… they just have to adopt the policy.
I mention this because all insurers have a “Default Management Program” these are typically helpful if you have missed payments due to illness and layoffs, but the programs will most likely be used in the coming months to help those affected by the fires.
Today, Genworth came out with a bulletin to lenders stating that in addition to the standard program (default management), lenders could offer their clients up to 6 month’s relief on their payments. I expect the other insurers will soon follow suit.
If you don’t have an insured mortgage, then the lender does not have (their own) insurance to fall back on. These lenders will adopt their own policies which will may be more strict in this situation.
Some lenders are currently offering:
• Deferral of payment (postponing it to a later date)
• Re-amortization of the loan to result in lower payments
• Capitalization of outstanding interest arrears and other eligible expenses (adding to the mortgage the missed interest or payments)
• Special payment arrangements
Ultimately, lenders don’t want to take the homes back and are working out solutions for this tragic happening. After calling your insurance company to find out how they can take care of your immediate expenses, contact your lender to confirm what solution they have available.
Mention that you are affected by the Fort McMurray fires and also if they don’t have solutions for you, mention the Default Management programs available through the insurers.
Teague Brinkworth (AMP)
Mortgage West – The Mortgage Centre
If you have any questions or if you're currently being affected by the fire and not sure where to turn next for help with your mortgage, please give us a call. Our office can be reached at 250.374.2222 any time.
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