# Cmhc denied, what are my options



## mikechico75

Hi, We tried to make our first purchase last week, and the guy from CIBC, who pre-approved us said that there was nothing to do with
our file. The Cmhc won't insure my loan. 
We have a bit more that 5% for downpayment.
The things is my credit report. While our salaries are 70 K + 40 K for my girfriend and our fico score are 708 for me and 800 for her,
I have a bankruptcy from 2008-06,discharged in 2009-04, that still appears only in the transunion credit report but not in the equifax one. 
Plus on top of that I have a judgment from 2012, that is 90% paid with proof. 

DO you think that i'm a lost case for now or should I check with someone else. This is our first duplex, so private mortgage are not an option.

Thanks for any advice,

M


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## scorpion_ca

Wait until you save 20% for down payment.


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## mikechico75

scorpion_ca said:


> Wait until you save 20% for down payment.


That could be too long for me though...


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## sags

The bank should provide a reason why they declined your credit application.

They should have inspected your application to ensure you fit the CMHC qualifications before they filed the application.

I would ask the bank and CMHC for the reason, so you can address the situation.

You could see a mortgage broker to see if they have other options, including private mortgage lenders.

Dominion Lending is now the largest mortgage provider in Canada.


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## mikechico75

sags said:


> The lender is obligated to provide a precise reason why they declined your credit application. I would ask the bank and CMHC for the reason, so you can address it.


Thanks, They said my credit report was the problem.


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## sags

Given the following from the CMHC website, I would suspect the judgement on your credit report is the problem. The bankruptcy should roll off the credit report soon.

_Negative information, such as *court judgements *or late debt payments, is typically *removed six or seven years after the filing date*. In regards to the time that judgements are kept on file Prince Edward Island is an exception. (In PEI, information about judgements is either removed seven years after the date satisfied (the date when the money owed has been paid) or it is removed ten years from the date filed. If the debt is not satisfied it could even be renewed for another ten year period. *Bankruptcies typically remain on a credit file for six years from the date of discharge*; there is some variance depending on the province or territory in question. However, bankruptcy information will remain on the credit file for a longer time if there has been more than one bankruptcy._

You could still discuss the situation with a mortgage broker, who may have access to private money. Be aware though, that it likely will cost a higher rate of interest for a few years.

Another option, although much less common.........is a vendor take back mortgage. The seller holds the mortgage because they want monthly income or need to sell the house to move or for an estate sale.

We actually bought a home where the vendor insisted we take a 5 year mortgage with him, as he was retired and wanted the retirement income, and he wasn't happy when we didn't renew the mortgage with him.

Local real estate agents usually know when such a situation is possible with their sellers.

You have a good credit score and your spouse has an excellent score, so you must be doing something right despite a couple of bumps along the way.

Good luck.........


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## mikechico75

sags said:


> Given the following from the CMHC website, I would suspect the judgement on your credit report is the problem. The bankruptcy should roll off the credit report soon.
> 
> _Negative information, such as *court judgements *or late debt payments, is typically *removed six or seven years after the filing date*. In regards to the time that judgements are kept on file Prince Edward Island is an exception. (In PEI, information about judgements is either removed seven years after the date satisfied (the date when the money owed has been paid) or it is removed ten years from the date filed. If the debt is not satisfied it could even be renewed for another ten year period. *Bankruptcies typically remain on a credit file for six years from the date of discharge*; there is some variance depending on the province or territory in question. However, bankruptcy information will remain on the credit file for a longer time if there has been more than one bankruptcy._
> 
> You could still discuss the situation with a mortgage broker, who may have access to private money. Be aware though, that it likely will cost a higher rate of interest for a few years.
> 
> Another option, although much less common.........is a vendor take back mortgage. The seller holds the mortgage because they want monthly income or need to sell the house to move or for an estate sale.
> 
> We actually bought a home where the vendor insisted we take a 5 year mortgage with him, as he was retired and wanted the retirement income, and he wasn't happy when we didn't renew the mortgage with him.
> 
> Local real estate agents usually know when such a situation is possible with their sellers.
> 
> You have a good credit score and your spouse has an excellent score, so you must be doing something right despite a couple of bumps along the way.
> 
> Good luck.........



Thanks a lot for the info, I will check the options out. It's weird because the bank approved us, but it was blocked at the CMHC. My bankrupty will dissapear in a couple on month and my judgment will be satisfied soon, but since we made the offer, paid for the inspection and invested time into planifying everthing, I find it sad to call it quits right away.

Sorry for my english i'm in montreal and mostly in french!


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## sags

Sometimes the CMHC gets itchy about their liabilities as well, and cut back on approvals.

There has been a lot of attention paid to them by the government and regulators as of late, and they may be quietly reducing their mortgage exposure by tightening rules.

It could be tightening rules in some housing markets only, or they are reaching their "capped out" limit again and don't want to ask the government to raise it.

I suspect applications for a CMHC insured mortgage in Calgary are going to be examined closely these days. Montreal is a bit of a "hot spot" as well.

Who knows what goes on behind closed doors.


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## Mortgage u/w

mikechico75 said:


> Hi, We tried to make our first purchase last week, and the guy from CIBC, who pre-approved us said that there was nothing to do with
> our file. The Cmhc won't insure my loan.
> We have a bit more that 5% for downpayment.
> The things is my credit report. While our salaries are 70 K + 40 K for my girfriend and our fico score are 708 for me and 800 for her,
> I have a bankruptcy from 2008-06,discharged in 2009-04, that still appears only in the transunion credit report but not in the equifax one.
> Plus on top of that I have a judgment from 2012, that is 90% paid with proof.
> 
> DO you think that i'm a lost case for now or should I check with someone else. This is our first duplex, so private mortgage are not an option.
> 
> Thanks for any advice,
> 
> M


As a mortgage lender myself, I can tell you that no bank will lend you money given your current situation. The fact you went bankrupt in 2008 is not the problem, but the fact you had a judgement after your liberation in 2012 and its still outstanding - that's your issue.

Simply put, the picture your painting is that you cannot manage your finances - sorry to be blunt. 

Your only option is a 'B' lender such as Home Trust or Equitable Bank. You will need to seek a mortgage broker to get access to these lenders. The rates will be slightly higher than a standard mortgage and you may be asked to put more money down. The only issue I can see is your unpaid judgement - you really need that paid off otherwise I don't see anyone wanting to lend you money when you haven't settled your credit issues yet.


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## dougboswell

Not sure how the CIBC person could have pre-approved you on the information you provided and then wonder why CMHC did not approve you.

Ask the person to read up on Genworth's guidelines and to see if you can get approved through them.

Whether you try to get a mortgage with a B lender or a private lender you will need at least 20% down. As mentioned above the fact there is still 10% owing on the judgment is going against you.


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## mikechico75

dougboswell said:


> Not sure how the CIBC person could have pre-approved you on the information you provided and then wonder why CMHC did not approve you.
> 
> Ask the person to read up on Genworth's guidelines and to see if you can get approved through them.
> 
> Whether you try to get a mortgage with a B lender or a private lender you will need at least 20% down. As mentioned above the fact there is still 10% owing on the judgment is going against you.


Anyway, I just paid my judgment in full this morning, but just getting the paperwork through equifax and transunion is going to take a least a month. By then, i'm sure the property will be sold 
CIBC approved my mortgage, the CMHC was the last step. He tried to negotiate with them but the best he told me was to get a co-signer and have 10%, witch was not an option for us.


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## Mortgage u/w

mikechico75 said:


> Anyway, I just paid my judgment in full this morning, but just getting the paperwork through equifax and transunion is going to take a least a month. By then, i'm sure the property will be sold
> CIBC approved my mortgage, the CMHC was the last step. He tried to negotiate with them but the best he told me was to get a co-signer and have 10%, witch was not an option for us.


Even though the judgement is paid, banks as well as the insurers (CMHC, Genworth or Canada Guaranty) will look for re-established credit after the last delinquency. From what you are describing, CIBC only approved a pre-approval. That's nothing more than a rate hold. An experienced representative would have been able to advise you better.

As for the previous comment, B-lenders and private lenders do not all require 20% down. Some will do less - just charge a higher premium to do so. And all 3 insurers have very similar criteria when it comes to previous BKs.


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## mikechico75

My credit is 4 years on re-established, i have two active credit card, a car loan + a small bank loan since 2012 and not 1 payment late.My score is 708, witch is not bad I've eard. And the CIBC procedure was more than a pre-approval, the rate hold was made this summer, he said that all was approved at CIBC, and all that was missing was the cmhc approval, anyway why would he lie?


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## heyjude

I think the refusal is entirely understandable. Lenders don't want to take a risk on someone who has a history of letting debt get out of hand. That is their right. I suggest taking the message to heart. Defer the home purchase until you and your fiancée have saved a higher deposit, at least enough to avoid needing mortgage insurance. By that time, your debt repayment may have worked itself through the system. Who knows, if we get the long predicted housing crash, you might get more house for your money.


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## Mortgage u/w

mikechico75 said:


> My credit is 4 years on re-established, i have two active credit card, a car loan + a small bank loan since 2012 and not 1 payment late.My score is 708, witch is not bad I've eard. And the CIBC procedure was more than a pre-approval, the rate hold was made this summer, he said that all was approved at CIBC, and all that was missing was the cmhc approval, anyway why would he lie?


I dont think he lied. I just think he should have advised you better. Had I seen an unpaid judgement on your credit bureau, I would advise you to get it paid asap in order to increase your changes of having the insurer approve you.

Your debts may not have had a late payment since 2012 but the judgement says otherwise. Given the 3 debts you have and the history of a bankruptcy, I would suggest you save some more cash in order to have a bigger down payment. Not only will it be easier to be approved, but you personal debt load would benefit it. Its easy to rack up debt. Its not as easy to repay.


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## mikechico75

Mortgage u/w said:


> I dont think he lied. I just think he should have advised you better. Had I seen an unpaid judgement on your credit bureau, I would advise you to get it paid asap in order to increase your changes of having the insurer approve you.
> 
> Your debts may not have had a late payment since 2012 but the judgement says otherwise. Given the 3 debts you have and the history of a bankruptcy, I would suggest you save some more cash in order to have a bigger down payment. Not only will it be easier to be approved, but you personal debt load would benefit it. Its easy to rack up debt. Its not as easy to repay.



I understand, since I was making monthly payments on my judgment, the bank advisor just asked me the account statement to prove that the payments where made and a letter confirming the arrangement.


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## Just a Guy

He didn't lie, CMHC isn't CIBC. You were probably approved by CIBC, pending CMHC approval, which was denied. They are two separate organizations, with different criteria. Just because you didn't get what you wanted doesn't mean someone lied to you. No one said you'd get money regardless. 

If it makes you feel better, I get rejected for mortgages all the time. I even got rejected on a clear title property once (they wouldn't lend me anything on it). I've never missed a payment, let alone declared bankruptcy, or had judgements against me.

Your issue is with CMHC. I don't use them ever, so I've got no idea how to get around them, other than to save up enough so you don't need them, or keep your financial house in order. You don't have a great track record, as you didn't learn from your bankruptcy....maybe now it'll sink in that there are consequences to your actions.

Reality is, no one HAS to lend you money, you aren't entitled to it, it's theirs. They have a right to protect it. They get to make the rules. 

Do you lend your money to just anyone? I'm sure you'd be cautious with your money...then again, maybe not.


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## SudburyGal

There will be other great properties for you. When you find "the one" it seems like you'll never find one again, but you will. I'm not sure what the market is like where you live, but where I live it's a buyers market right now with lots of competing properties listed, there will be even more come spring.  Best to wait until your finances are in order with these issues behind you.


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## birdman

I agree with mortgage u/w in that you have and outstanding judgement against you!! Even if you pay off the judgemernt I expect it will stay with you for a while. Face it, you are a discharged bankrupt and then a few years after your discharge you have a judgement against you. Don't think many lenders would touch this.


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## OhGreatGuru

Sounds to me like the CIBC person is making CMHC the bad guy, rather than admit he should never have given you a pre-approval before clearing it with CMHC. The bank can't give you a 5% downpayment mortgage unless it is insured. You don't qualify for mortgage insurance based on your current credit record. Them's the breaks.


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## Rusty O'Toole

Here are 2 possible solutions. One is talk to a mortgage broker. They can get loans the banks can't, in fact that is their main business. Expect to pay higher interest rates.

Another is to buy privately. I sold a house to someone in credit counseling who couldn't get a loan otherwise, and who had just lost their last house. But, I knew they were a couple in a stable relationship both with good jobs and I visited their house which was spotless and well maintained. So I took a chance, took back a mortgage with a 10% down payment and I charged them 8% interest. After 2 years they had their finances in good shape, refinanced the house at a bank at 3% and paid me off. They were happy, I was happy, and the bank was happy.


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