Foreclosure rate steadily increasing in Fort McMurray

Fort McMurray saw about eight times more foreclosures on homes in 2019 than in 2015, new numbers from the province show.

In the 2015-16 fiscal year, there were 26 foreclosure statements of claim in Alberta's oilsands capital; in 2018-19, there were 220, according todata from Alberta Justice and Solicitor General. In the current fiscal year, there were219 claims to the end of November.

A drop in property prices and increase in insurance costs since the 2016 fire have put pressure on homeowners in the town. Many homeowners bought when prices were much higher and there were abundant jobsin the oil and gas industry.

But the work has disappeared, household incomes have dropped and many are walking away from their homes to seek opportunities elsewhere.

Foreclosure statements of claim are court documents, usually filed by a bank to begin repossessing a property from a borrower who has fallen behind on mortgage payments.

The process isn't complete until a judge rules and issues a foreclosure order.

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Ryan Chernesky, founder of Calgary-based Alberta Foreclosure Stoppers, which helps people stave off foreclosure and get their finances back on track, says about 15 per cent of his business is coming from Fort McMurray, acommunity whichaccounts for1.6 per cent of Alberta's population.

"I think the hard times are already here," Cherneskysaid. "There's a lot of homeowners that are very much underwater and they're simply biding time, hoping the property market will increase."

He said some of his clients from Fort McMurray have seen their property value drop by 50 per cent. Even if they can sell, they get too little to cover the mortgage.

Condo owners in the community are also struggling, said Chernesky, who owns two units in Fort McMurray.

• Soaring condo insurance rates help push Fort McMurray homeowner into bankruptcy

Chernesky, along with many others, hasseen a dramatic increasein the cost of condo insurance and with the drop in valuecondos are becomingdifficult to keep or sell.

The insurance premium on one of his condos jumped$150 a month.

"It's a real drain on my personal resources," said Chernesky. "There are individual unit owners, they're getting foreclosed. They simply can't afford it."

According to the Fort McMurray Real Estate Board, seven foreclosed homes were sold in Fort McMurray in the 2015 calendar year. That number grew to178 by2018. As of Dec. 11, 2019,177 foreclosed homes were sold.

Prices 'in line' with the rest of Alberta

Andrew Weir, realtor and director with the Fort McMurray Real Estate Board, said the number of foreclosures on the market at any one time over the last few years has been stable ataround 100 units.

"The market is a lot more balanced now than it was, and there's a lot less inventory out there," Weir said.

"Prices have fallen a lot, to the point where we are more in line with communities outside, throughout the rest of Alberta," he said.

Thoseprices are now more affordable for potential homeowners, he added. Indeed, a2018 market analysis foundFort McMurray is the most affordable place to buy a home in Alberta.

Weirowns multiple properties in Fort McMurray, acquired over a number of years.

"It's been a ride, but I'm not pulling my hair out."

"As somebody that pays very close attention to the market... when I look at the numbers they're not telling me as scary a story as what a lot of homeowners would believe it is."

Homes harder to sell

Paul McLeod recently moved from Fort McMurrayto Lac La Biche because there wasn't enough work for his company Vancon Services Ltd.

He considered selling his downtown bungalow which he boughtin 2011 for about $610,000, butfiguredhe could getonly half of what he paid.

"I would like to sell. Would I like to lose all that money? Absolutely not," McLeod said.

He's now renting out the home, but the incomedoesn't coverhalf of the monthly bills.

He saidmore of the commuter population needs to settle in Fort McMurray to bring more people into the market.

"It's about the oilsands turning around and providing workers with the living-out allowance in order to live back in the community,"McLeodsaid.