My husband and I cosigned a mortgage for my son. He has defaulted on his mortgage and it has been sold through foreclosure. This house is CMHC insured. The house sold for $90,000 less than the mortgage is for. Now what happens? We understand the CMHC pays the mortgage to the Bank, what happens with this $90,000 deficiency?

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Our mortgage company, which is self insured, went bankrupt a month after we got our mortgage. all of our paperwork shows we are cmhc insured - but our mc did not actually complete the paperwork and our home has dropped over 100k since we built/purchased 2 years ago. quite obviously, cmhc will not insure us as we owe more on the home than it is worth. i lost my job and we are now on one income. we can get a mortgage through any company that deals with genworth, however only for what the home is worth now. our tds will not allow a second mortgage. our mc is refusing all of our ideas - we have been working with them for months now to get this figured out. they have made 60k off of us free and clear, and they refuse to write off the remaining balance and accept a lower mortgage buyout. it is their fault we are in this situation by misleading us (and our lawyer never caught the lie about being cmhc insured when he went over the paperwork originally so it was very well done - sneaky) and not budging at all. we are facing foreclosure and/or bankruptcy. we have a couple of expert mortgage brokers dealing with them on our behalf, but have been advised to seek a lawyers advise. if they foreclose on us, are we able to purchase another home right away? what happens? we need to have a home to live in and actually found a place that is well within the mortgage we can afford and get (our one income does support the almost 8% payments we are making now) but would we be able to buy it? we have enough to make our payments currently, but with our expenses we have little left over to pay for a lawyer or court fees to fight the mc for an honorable discharge or whatever the case would be. are there any lawyers (or someone who has been in this situation) here that can give me some advise? thanks, but i don't need links sending me to junk sites about work from home to make cash. i don't know how that even answers my question anyways? good, that fool deleted his stupid post. thank you bsherman - we've tried the refinancing but our mortgage company has gone bankrupt, we can get mortgages from numerous other companies but our mc won't accept them as our home (and therefore the new mortgages without cmhc) is worth much less than it was. we may look into a short sale. thank you again.

The circumstances leading up to foreclosure are irrelevant from the perspective of the credit reporting agencies. Once foreclosure happens, then the defaulting homeowner's credit score takes a large negative hit. It can take years to rebuild a credit score after a foreclosure. This may not be fair, but it is how personal finance works. Therefore, you need to plan accordingly. Try your best to avoid foreclosure through a short sale or refinancing. If you do enter foreclosure, then do not plan on being able to secure another mortgage anytime soon. Hope everything works out for you.