Monika & Clark are from the old country. They immigrated to Canada some 10 years ago. He climbed the ladder of success in his trade (fine woodwork, finishing carpentry) until he decided 7 years ago to open his own company. She has cared for their two children, a full-time job!

They bought a home five years ago for $150,000. He has done extensive renovations. The mortgagee (lender) gave him the alternative of paying his own property taxes. In the last four years, lack of income forced them to make choices as to who would get paid and who would have to wait. The choice of the later payment went the path of least resistance...the tax department. They now owe almost $10,000 in back property taxes.

Their mortgage company offered them a renewal of mortgage at very good rate, subject to them proving their taxes were current. They went in to explain why the taxes were late, and tried to get a helping hand to pay the extra $10,000. They realized they were in trouble some time ago, and put their home up for sale. In the meantime, waiting for an offer, Clark has worked odd jobs at night to make enough money to keep their current bills paid, including the mortgage.

Their mortgage present mortgage lender cannot accommodate them with more money because the family income has dwindled to a trickle. The new loan would not meet the Bank's lending criteria. The tax department has told them that unless they get paid the arrears, they could lose the house. The mortgage lender will have to intervene to pay the taxes whether they like it or not, but immediately thereafter, the Bank will have no choice but to sue our couple for an "overdue maturity". The couple have never missed a mortgage payment, they have never been late on their obligations, except with the tax department. Clark does what he has to do to make ends meet. And now this!

I listen to their plight. I have empathy for their situation. Reality dictates that they have but two choices:

a) refinance with an equity type lender,

b) let the house go up for sale by the Bank and hope that the sale price will be high enough to pay the debt, including the taxes.

If they let the Bank sell the house under what is called a "Power of Sale", usually vultures abound to buy the house at a very deep discount. If the sale price does not pay all the debt, the Bank will come after them personally for the difference. Their credit rating now goes into the toilet.

If they refinance with an equity lender, it will save their credit rating but the cost to them will be prohibitive because their provable income is low. Welcome to Canada! Again they decide to go the path of least resistance, the expensive route. For a $100,000 mortgage the total cost of refinancing will exceed $3500.

They chose this route to maintain their credit rating, pay the back taxes, and not fall prey to pressure to "dump" their home at a lowball price. They will continue to offer it for sale because they really can't afford to live there. A sad economy takes its toll.