In recessionary times, it would seem that Canadian financial institutions remain true to form. By that I mean, Canadian banking professionals are again seeking to be proactive and flexible in dealing with that nation's current residential mortgage troubles. It is my opinion that our American bankers could have dampened a fair amount of our current economic turmoil by taking a smart and compassionate page from the Canadian mortgage industry playbook.

A quick and interesting article from Tara Perkins, at globeandmail.com, reveals how Canadian bankers have solicited their customers to come in for help with problematic mortgage payments. It would seem that, unlike their American counterparts, Canadian bankers like to deal with tough scenarios before the dung hits the fan.

Toronto-Dominion Bank chief executive Ed Clark stated his bank's focus this way: "We are really trying to say to our clients and customers: 'Don't wait until you have a problem. If you think you might have a problem, why don't you come talk to us and we can then sit with you and try to get ahead of the problem and do some things?'

What a novel, responsible and forthright idea.

The solutions which Canadian banks are willing to discuss with financially troubled mortgage customers take several convenient forms. Some customers may be directed toward switching out flexible rate mortgages in exchange for fixed rate notes. Some customers might be offered short-term payment deferrals in cases where a job shift is expected to restore income. Lengthened amortization terms may allow some customers to keep their homes via lowered monthly payments. In some cases, Canadian banks are even willing to negotiate custom mortgage notes with unique terms.

For many of the people faced with mortgage turmoil in the U.S., it's already too late to help. In most cases, our banks have carelessly stepped past the point of being truly helpful. One can only speculate upon why exactly that has happened. However, as foreclosure actions continue, and as we're startled like little consumer deer in the headlights of oncoming consumer debt defaults, please let us remember that simply throwing up our hands in defeat, and then crawling in a corner muttering, "I've failed," has never helped anyone.

Be ready to fight for your good name, your dignity, and your credit score. When the banks come calling for your head, demand that they discuss some options with you. If they won't do that, then when you have your day in court, tell the judge that the bank failed to fully exercise due diligence and good faith. Perhaps the judge will take up the gauntlet and make those corporate lawyers sweat a little. Really, you have nothing to lose by trying.

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