A longer list of Red Deer properties whose owners have fallen into arrears with tax payments is just one sign of harder economic times.
Local mortgage and insolvency experts also report seeing more Central Albertans who are feeling the financial pinch, and wanting to re-work household budgets and repayments.
“It’s been a good three years where insolvency has been busier in Alberta,” said Donna Carson, senior v-p and licensed insolvency trustee with MNP Debt.
She’s notice a sizable increase of people coming in since early January to ask for help managing their debts and cash flow.
“In the New Year, it’s as if all the people who had been holding off to see what would happen in the oilfield decided its not going to turn around for them, and so they’d better come in,” Carson added.
Pam Pikkert, mortgage broker/partner with Regional Mortgage Group in Red Deer, has also been helping more people refinance their mortgages to pay off debts in the last few months.
The problem for many homeowners are new banking rules that only allow refinancing for up to 80 per cent of a property’s value. “When property values have fallen, this often doesn’t allow room for refinancing,” she added.
At a recent a seminar held by a mortgage default insurer, she learned that cases of people defaulting on their mortgages is on the rise, but is still a very small portion of all mortgages — only some .05 per cent of property payments are outstanding by 90 days or more.
And people are still moving to Alberta, meaning that our provincial economy, as slow as it is, is providing more jobs than in other regions of the country, said Pikkert. ”We’re still above the national average, as far as economies go.”
With a decent sized I.T.-industry, Alberta is more diversified than parts of Saskatchewan, she said, “so we shouldn’t be just focused on gloom and doom.”
Carson and Pikkert agree that people struggling with finances should seek help sooner rather than later as there are various debt restructuring/credit counselling solutions.
Homeowners who fear defaulting on their mortgage should discuss options with their mortgage provider, or even their mortgage default insurer, said Pikkert. “They don’t want to foreclose because it’s expensive… they have programs on the consumer’s behalf.”