Walking away from a mortgage; will it start to happen?

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The American housing crisis during the recession was exacerbated by struggling homeowners who walked away from mortgages leaving banks and mortgage lenders with huge losses. Non-recourse mortgages are still allowed in 10 states but are also possible in Saskatchewan and Alberta. The Financial Post reports that it happened in the 1980’s at could happen again. Because those with a downpayment of 20 per cent of lower have to be covered by mortgage insurance the risk is limited to those who put in larger downpayments and are prepared to lose that. Mark Pinsonneault, senior economist with National Bank says that there would have to be a price drop of at least 20 per cent for it to make sense and says we are far from that position. 

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