The recession has pushed the seizures of properties to a record level in January in Quebec.

The recession has pushed the seizures of properties to a record level in January in Quebec. The number of seizures recorded in the Province has increased by 32,5% compared to January 2009, a high in five years.

“When one has a set budget and when our incomes drop because of a job loss or of a reduction of working hours, it is obvious that that has an impact on the refunding of our credits”, commented Carole Laberge, director of communications with the ACEF of the north of Montreal.

As a whole, 334 households handed in their keys to their mortgage lender, according to the firm GDL Crédit Ressource which counts the renunciations recorded in the Province. As for the month of December, the majority of the residences seized by the financial institutions, i.e. 49%, were located in the Greater Montreal Region, or in the Laval-Laurentides area, in Montérégie and in Montreal.

The average mortgage balance of the properties seized throughout the Province amounted to 153.137$ last month. The highest balance was recorded in Montreal itself, at 287,365$, whereas the lowest balance was recorded in Abitibi, with 63.581$.

Mrs. Laberge blames the mortgage lenders who granted too generous loans during the last years. “Financial institutions have given mortgages whose monthly payments go beyond 30% of net incomes. I saw some in my offices from 42 to 45%”, she said.

Owners who do not have any more the means of discharging their loan can sell their residence but Carole Laberge specifies that the product of transaction is not always high enough to cover the contracted debt.

“If the purchase is recent and when restorations were made one can be saddled-up with the house”, illustrated Mrs. Laberge.

For the whole of 2009, 3127 houses were seized in the Province, a strong increase compared to the 2353 seizures carried out in 2008.

The wave of seizures could however be stabilized, if one can believe the number of notices of exercise which have been given in January.

A notice of exercise is a 60-day notice which orders the owners to discharge the accumulated refunding delays within two months in order to avoid losing their residence.

As such 742 notices were dispatched in January, that is to say only one more than in January 2009, a decrease compared to the 788 notices given last December.

The owner, GDL Crédit Ressource, who registers the data, refuses to shout victory and believes that the next three months will be determining. “I am not certain that the notices will drop in February because there have been 55 of them on February 1”, said Daniel Langlois.