CMHC Loans - Full Recourse

I wrote in a previous post that I was unaware that mortgages in the States were non recourse loans. Essentially, the home owner or speculator defaults - they can walk away and the house and loan, becomes the Bank's problem.

It is easy to see how this lack of personal responsibility can lead to reckless speculation. Unless one has filed personal bankruptcy we don't have this luxury in Canada. Which of course makes our Banks happy and stable.

A Calgary reader looking to buy a new home does not care about any of this. Take out a mortgage and it is understood - you are on the hook.

But did you know loans made by the Canadian Mortgage and Home Corporation (CMHC) are also full recourse loans? I never knew this but it makes sense. It helps stabilizes our real estate market by keeping unqualified home buyers and speculators on the sidelines.

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