For those of you who don't know me,
my name is Ira Smith and I am
president of Ira Smith Trustee
& Receiver Inc.
.
Firstly, we hope that you and your family
are safe, healthy and secure
during this coronavirus pandemic.
I want to assure you that Ira
Smith Trustee& Receiver Inc.
is fully operational,
both myself and Brandon Smith are
available to speak with you at any time.
We're holding all meetings and conferences
on either telephone or by video meeting.
So if you have any questions at all about
this upcoming blog I'm going to tell
you about or anything else at all.
Feel free to give us a shout.
Shoot us an email.
Give us a phone call.
We would love to hear from you.
Brandon wrote a blog today on mortgage
deferrals in Canada
as soon as the coronavirus pandemic hit
and the lockdown started,
the Office of the Superintendent
of Financial Institutions,
otherwise known as OSFI,
which is the group that supervises
federally chartered lenders
being mainly the large banks,
went into action because they understood
that Canadians were suffering
from the economic turmoil
of the COVID-19 lockdown.
So what OSFI did was they supported
the banks so that the banks could give
mortgage deferral deals
to their borrowers.
Now, most of the deals happened
during March and April.
It happened right away
because in the lockdown,
people either lost their jobs or their
income was greatly reduced and something
needed to be done so that there would not
be a whole array of mortgage defaults.
So what OSFI did
was they said to the banks,
you can go make arrangements
with your borrowers, if necessary,
for mortgage deferrals.
Now, it can't be for more than six months.
So that roughly takes you
to the end of September.
And the banks went and did
that.  OSFI told the banks
you don't have to show that those
mortgages are in default, even though
you're not receiving payments.
You don't have to up your capital
requirements because of
those nonpaying mortgages.
And they went to mortgage insurers like
CMHC and said
you're not going to be receiving
the insurance premiums during those
mortgage deferral months, but you don't
have to show anything in default.
And we're not going to hold
default against you.
You don't have to take action.
You don't have to do anything.
So those deals were made.
Each of the deals were somewhat unique
between each bank and each
of their borrowers.
The banks had some flexibility and they
looked at it on a case by case basis.
The last reported number was
that by the end of July,
a couple of months ago,
there was about $170
billion worth of mortgage
deferral deals in place.
Now, those deals are more or less going
to end, be gone by the end of September.
A lot of them have already finished.
The banks are reporting that about 80
to 90 percent of the people who were given
mortgage deferral deals that have now
ended are current in their mortgage
payments, which means about 10 to 20
percent of Canadians are not current.
So that is how the mortgage
deferral arrangements were allowed to be
made by OSFI
so that Canadians could benefit.
Very recently,
OSFI came out with an announcement to all
the federally regulated lenders saying
after September 30th,
all the normal rules apply again.
So any mortgage deferral deals
on the books that
are either made during September,
which go for more than three months,
or any mortgage deferral deals made after
September 30th, are going to be
under normal policies, normal rules.
So no longer are there going to be
reporting or capital or other benefits
given to the lenders, which means
mortgage deferral deals
are going to be far and few between.
You may still be experiencing
financial problems due to COVID-19.
None of this was your fault,
but you're feeling the brunt of it.
So what is it that you can do?
Well, we have three killer ways
that you can start dealing with
money problems you feel you're going
to have once your mortgage deferral deal
ends and is not renewed by the banks.
The first most important thing
is look at your family budget.
Look at your household budget.
If you don't have one,
you better create one quickly.
Look at all of the sources of income
for your family and all the expenses.
That you're spending
paying for, for your family.
Look at the last six months
during the lockdown.
See what it looks like,
take an average amount to come up with a
representative monthly family budget.
Then look at how it's going to change.
Don't forget, now you have to add in your
monthly mortgage payments that you may not
have been making in full because
of your mortgage deferral deal.
Take a look at it critically.
See what expenses you can cut out,
see what other kinds of income maybe
members of your family can generate.
And then you come up with your most
realistic monthly family household budget.
Now, take a look at the bottom line.
Are you spending more than you're
taking in or are you spending less
if it turns out you're spending more?
You're going to have to adjust it so
that you're not incurring fresh debt just
to make your normal monthly expenses.
So that's the first thing.
Get a solid family budget developed.
Second, contact your
mortgagee, contact your lender.
Let them know that you've done
a very detailed family budget.
Let them know it looks like you might have
problems with the monthly
mortgage payments.
Now that the deferral deal is off,
speak to your lender about what
they may be able to do for you.
You may be surprised they may
try to do something for you.
One thing for sure,
your lender is going to be extremely
impressed when you start off by telling
them you have a detailed family budget.
You've now recognized there might be
a problem and you're reaching out to your
lender before the problem even occurs.
You will be the most liked person
by that lender in the 10 or 20 percent
of Canadians that are still having
problems with their mortgage payments.
That's the second thing.
Once you've done the family budget
and you've contacted your lender,
if there's nothing your lender can do
for you, call either me or Brandon Smith.
We will look at your situation.
We will get more detailed
financial information from you.
We will look at your budget.
We will look at your assets.
We will look at your debts,
and we will give you a consultation over
the phone or by video
to explain to you what our recommendations
are and what we think your
options are.  Mention
this video, mention this blog,
and we will do that all for you for free.
So I hope that you have
enjoyed this video.
I hope that you have found
it informative and helpful.
Again, we hope that you and your
family are safe, secure and healthy.
The Ira Smith Team is fully operational.
Both myself and Brandon Smith are
available to answer any questions you
might have about this blog
or anything else whatsoever.
Give us a phone call.
Shoot us an email.
We would love to speak with you.
