Comments on: “Second, in Canada, when a homeowner defaults on a mortgage, the homeowner is personally liable for any deficiency that remains after a foreclosure and sale of the home.” http://asknolanmatthias.com/second-in-canada-when-a-homeowner-defaults-on-a-mortgage-the-homeowner-is-personally-liable-for-any-deficiency-that-remains-after-a-foreclosure-and-sale-of-the-home/ Wed, 10 Feb 2010 02:26:26 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Nolan Matthias http://asknolanmatthias.com/second-in-canada-when-a-homeowner-defaults-on-a-mortgage-the-homeowner-is-personally-liable-for-any-deficiency-that-remains-after-a-foreclosure-and-sale-of-the-home/comment-page-1/#comment-282 Nolan Matthias Wed, 27 Jan 2010 21:25:45 +0000 http://asknolanmatthias.com/?p=477#comment-282 The good news is that there is already a personal guarantee in Canada. The bank has every right to chase you for losses - most people just are not aware of this. As far as my thoughts on rising interest rates go, I am the first to admit that no ones crystal ball is even capable of being clear. I never make predictions, I try to prepare my clients for possibilities and let them make informed decisions. What we know is that we are in an emergency interest rate scenario. Eventually emergency rates will end and will go back to normal. The question is what does normal look like? The answer, it looks like stable inflation. I do not think rates will go to 7, 8, or 9, percent as some are predicting. In fact, I think there is a possibility prime could hover around 4% for a very long time, keep in mind though that this is not a prediction, it is a possibility. It will all come down to inflation remaining stable. Ultimately, I think there are too many other factors involved in predicting housing market fluctuations than to solely focus on interest rates. You have to look at what would happen to rents if it became to expensive to own (they would go up, making owning look better again, causing more demand on housing), as well as other factors such as migration, job markets, etc. There are a lot of unknowns to make any sort of reasonable prediction. What is important is that people who buy, buy with the intent of living in the same house for the long term. Long term ownership will always out benefit renting. Cheers, Nolan The good news is that there is already a personal guarantee in Canada. The bank has every right to chase you for losses – most people just are not aware of this.

As far as my thoughts on rising interest rates go, I am the first to admit that no ones crystal ball is even capable of being clear. I never make predictions, I try to prepare my clients for possibilities and let them make informed decisions.

What we know is that we are in an emergency interest rate scenario. Eventually emergency rates will end and will go back to normal. The question is what does normal look like? The answer, it looks like stable inflation. I do not think rates will go to 7, 8, or 9, percent as some are predicting. In fact, I think there is a possibility prime could hover around 4% for a very long time, keep in mind though that this is not a prediction, it is a possibility. It will all come down to inflation remaining stable.

Ultimately, I think there are too many other factors involved in predicting housing market fluctuations than to solely focus on interest rates. You have to look at what would happen to rents if it became to expensive to own (they would go up, making owning look better again, causing more demand on housing), as well as other factors such as migration, job markets, etc. There are a lot of unknowns to make any sort of reasonable prediction. What is important is that people who buy, buy with the intent of living in the same house for the long term. Long term ownership will always out benefit renting.

Cheers,

Nolan

]]> By: Financial Uproar http://asknolanmatthias.com/second-in-canada-when-a-homeowner-defaults-on-a-mortgage-the-homeowner-is-personally-liable-for-any-deficiency-that-remains-after-a-foreclosure-and-sale-of-the-home/comment-page-1/#comment-281 Financial Uproar Wed, 27 Jan 2010 20:56:17 +0000 http://asknolanmatthias.com/?p=477#comment-281 Nice post Nolan. There is no doubt in my mind that attaching a personal guarantee to mortgages will make people think twice about just walking away from their homes. There will be some angry people because they can't afford to sell, but whatever. People will get over it. I'm more interested in your thoughts on rising interest rates acting as a natural anchor on property values. That's what I think will happen, stagnant values for a little while until incomes catch up to home values. Would you say the average house price in Canada will be up in 5 years? How much? (Not to put you on the spot or anything :D) I admit, I read Garth Turner. The comments are particularly entertaining. He's got some real whack job readers! Nice post Nolan.

There is no doubt in my mind that attaching a personal guarantee to mortgages will make people think twice about just walking away from their homes. There will be some angry people because they can’t afford to sell, but whatever. People will get over it.

I’m more interested in your thoughts on rising interest rates acting as a natural anchor on property values. That’s what I think will happen, stagnant values for a little while until incomes catch up to home values. Would you say the average house price in Canada will be up in 5 years? How much? (Not to put you on the spot or anything :D )

I admit, I read Garth Turner. The comments are particularly entertaining. He’s got some real whack job readers!

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