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Many Canadian homeowners are facing financial setbacks and are relieved to hear there may be light at the end of the mortgage tunnel.
Homeowners purchasing a home with a down payment of less than 20% usually know they need mortgage insurance, but many are surprised to learn Canadian Mortgage and Housing Corporation (CMHC) isn’t the only game in town.
Genworth Financial recently presented to Royal LePage agents about mortgage insurance and their Homeowner Assistance Program, designed to provide relief to homeowners experiencing temporary financial difficulties as the result of an unexpected life event.
The company insures thousands of high-ratio mortgages and negotiates “workouts” with clients experiencing legitimate financial difficulty including job loss, divorce, or unexpected illness. Their goal is to protect the lender from financial loss and provide homeowners with the breathing room they need to stay in their home.
Genworth says each situation is assessed individually, however with early intervention most people are able to negotiate “workouts” that allow them to stay in their house by deferring payments, increasing the amortization period, or even receiving help selling their house to cover any loan shortfalls.
Assistance isn’t guaranteed, however Genworth does its best to work with banks and investors to negotiate loan modifications making it possible for clients to avoid foreclosure or bankruptcy.
Like CMHC, Genworth insurance is calculated as a percentage of the loan and is built into the mortgage amount. On a $200,000 mortgage, the insurance would be $4,000, bringing the total loan amount to $204,000.