Forced sales of real estate (Power of Sale) are on the rise in the Greater Toronto Area due to the increased burden of mortgage interest.
Forced sales in Toronto increased from 24 cases per month as of February last year to 105 cases in February this year and have increased by nearly 10% per month since July, currently reaching the threshold of 150 cases per month.
However, after checking with the industry, it appears that the situation of Koreans is still far from being forced to sell.
According to Canada Hana Bank, although the delinquency rate, which was close to 0%, has slightly increased, there has been only one customer in all of Canada who lost their home due to a forced sale over the past three years.
The bank said, “It is true that customers’ interest burden has increased, and monthly payments are often delayed by a few days. However, due to the nature of Koreans, most people pay their monthly payments faithfully, and those who own multiple homes are more likely to be late in their payments. “I tend to organize things in advance before they occur.”
First Financial CEO Han Su-ji also reported a similar situation. He said, “It’s been 14 years since the company opened, and there hasn’t been a single Power of Sale case. Korean customers are very sensitive to being forced to lose their homes, so there have been no cases of forced sales even for those who rented from private lenders.” However, as the monthly payment burden increases, Koreans are struggling just fine.
Representative Han said, “There are customers who have been requesting deferment for several months due to an emergency situation where they are unable to pay their monthly payments. Also, as the burden is heavy on those who own multiple homes, inquiries about sale and repayment are more frequent than before. “It has more than tripled,” he said.
In Canada, more than 100,000 mortgage renewals occur every month, many of which are concentrated in the Greater Toronto Area.
Experts said, “Many of those renewing their mortgages these days were paying fixed interest rates in the 1% range, but it is inevitable that the shock will be severe when the interest burden suddenly rises to the 6% range. Koreans are holding on well so far, but I am worried about the future.” collected.