House keys sent to the bank? Your thoughts on mortgage defaults
'It's a question of common sense and priorities'
Some Albertans are walking away from their mortgages by putting their keys in the mail and sending them back to the bank.
It's a phenomenon known as jingle mail — sparked by a combination of high debt and lost jobs — and was a big problem in Alberta back in the 1980s.
As a result, the federal government is watching the Alberta market closely. Jingle mail, or strategic defaults, weaken the housing market and increase loan losses among Canada's banks, say experts.
We asked what this means to you: Does your mortgage keep you awake at night? What would make you send your house keys to the bank? Any personal mortgage anecdotes you want to share?
You weighed in via CBC Forum, our new experiment to encourage a different kind of discussion on our website. Here are some of the best comments made during the discussion.
Please note that user names are not necessarily the names of commenters. Some comments have been altered to correct spelling and to conform to CBC style. Click on the user name to see the comment in the blog format.
Many chimed in with their own mortgage advice.
- "Sending house keys back to the bank seems very irresponsible. The banks are not going to absorb the costs — customers will be on the hook in the end." — EOttawa
- "People who buy the McMansions in the hopes that someday they will become part of the upper class are the ones who should worry. Big risks have serious consequences. Good luck with it." — Chris K
- "No, it doesn't keep me awake for the simple reason that we bought a home well within our means with a mortgage way lower than what the banks said we could borrow ... It's a question of common sense and priorities." — docp
There was some discussion on who should be blamed.
- "Lots of blame and finger pointing to go round. Bottom line, as many others have said, it falls on personal responsibility to make good decisions and sometimes circumstances outside our control force us to make tough decisions to survive — like using 'jingle mail' in Alberta." — Don Watson
Several commenters even had their own jingle mail stories.
- "My ex-husband and I returned the keys to the bank when it became clear that he was unable to maintain the mortgage payments on the home he had bought before we were married. This happened in the first year of marriage and it was a terrible blow to him. Later he declared bankruptcy." — LinneaEldred
- "We purchased our home within our means and have been able to keep up with the payments. We lived in Fort McMurray for four years, after they went through the downturn of the economy in the early 80s. Folks were turning in their keys then and walking away. People still don't learn from past mistakes." —Leslie Riley
There were even some thoughts on the future … or lack of it.
- "I have a mortgage and I also have a full-time job, yet I still worry about the future of my mortgage. I don't believe that we need to point out the fact that even if you were or are smart about your money, you cannot predict your future." —Samantha R.