05/20/2026
It breaks my heart when I see homeowners losing their homes.
It is evident that the US & Canadian economies are underperforming. Inflation is still high in USA & Canada and life feels way more expensive. The
grocery bill feels like it is five times more than what we used to pay to feed our families.
The unemployment rate is still high, credit debt is increasing and the looming tariff war is creating upward pressure on prices of goods. The US & Iran war through its complex entanglement with China & Russia is not helping
either. The cost of everything increased again over the last month. Look at where the oil prices are!
The high mortgage rates and the decline in home values in Canada and parts of USA has made it tough for new homebuyers to enter the market whilst current homeowners are finding it difficult to afford their mortgage payments.
For at least two years, I have noticed distressed borrowers defaulting on their mortgage payments. Unfortunately, many eventually lose possession of their homes and lose all the equity. There is no formula that quantifies the stress and trauma a family faces when they lose the home that holds beautiful memories; a newly married couple may have started their life together in that home, someone's baby grew up in that home or the epic parties that you threw for your family and friends.
I have also noticed that when homeowners cannot meet their payment obligation, they completely stop communicating with their lender. Most lenders do not want borrowers to miss payments. The legal enforcement process is lengthy, expensive and tedious. Most lenders would rather cooperate with borrowers. I have been doing exactly that!
When communication stops, the lender assumes the borrower will not resolve the matter, leaving legal enforcement as the only option. These legal costs are added on top of mortgage arrears and reduce the equity left after the sale of the property. If borrowers sell their own properties, they can often keep the remaining equity.
If anyone is in a distressed position where you cannot make mortgage payments, here are some tips:
• Ask for a Payment Plan
Most lenders are sympathetic and would rather help you cover missed payments through an installment plan.
• DO NOT stop communicating with your lender
Once communication stops, the lender assumes the worst and legal enforcement may begin.
• Pay something rather than nothing
Partial payments show good faith and responsibility. Lenders look at this positively.
• Be proactive & take action quickly
Delays cause mortgage arrears to accumulate quickly and borrowers lose equity in their homes.
• Sell the property as soon as possible
If you cannot afford the mortgage payment, selling quickly may allow you to
preserve your equity. You can use the next few months to stabilize your income and purchase another home.
I know times are tough for everyone but remember that economic cycles are
cyclical; things will get better. We are all in this together!
