Housing boom, trailer bust

When Linda Casson bought a piece property in Hidden Valley a few years ago she thought that it would grow in value. And it did. It's now worth so much, Casson's asset has turned into a liability.

When Linda Casson bought a piece property in Hidden Valley a few years ago she thought that it would grow in value.

And it did.

It’s now worth so much, Casson’s asset has turned into a liability.

“I’m just stymied,” said the former Whitehorse city councillor. “I have no idea what’s going to happen.”

It all started when Casson went to renew her mortgage.

“Originally when I went in for my renewal the banker and I thought it would be easy,” she said.

The mortgage had been renewed three times since she bought the two-acre lot in 2003.

Her plan was to consolidate some debt with the extra equity.

It seemed like a good idea, since the property had appreciated $50,000 in the last two years.

But that turned out to be more of a curse than a blessing.

Because there was a trailer on the property rather than a house, the Canadian Mortgage and Housing Corporation didn’t believe the appraisal.

The land and the trailer was valued at over $300,000.

Her banker had to research the sale of other similar properties in Whitehorse before the CMHC would sign off on anything.

Once she had the blessing of the CMHC, Casson sent all the paperwork off to the lawyers.

That’s when the whole thing came to a “screeching halt,” said Casson.

While the CMHC accepted the appraisal, the bank now required that she take out a larger insurance policy on the trailer.

When she bought the place eight years ago, it was insured for just over $60,000. But the land isn’t the only thing that has risen in value.

The bank wanted the trailer insured for its replacement value – more than $130,000.

This created another problem.

None of the insurance brokers Casson approached were willing to issue a policy that large for a trailer.

“There is one company left that I have to go talk to, but I was told by a very knowledgeable person, a broker in the field, that they won’t go for more, so I’m not terribly optimistic,” she said.

As frustrating as the situation is, Casson is still counting her blessings.

“I have the assurance from my banker that as long as I don’t default on any payments they have to maintain some kind of mortgage, so at least I’m not going to be bankrupt,” she said. “That was really reassuring because I didn’t get that message for about six weeks.”

Knowing what she knows now, Casson said she would have done things differently.

“I pulled a couple of consolidations but I could have been hammering down the mortgage,” she said. “If I owned that place flat out I’d now have a whole bunch more options.”

She’s been keeping the place as a rental property.

Her son is renting it right now.

But even if she wanted to sell, there’s a possibility that she couldn’t.

Any potential buyer would be faced with the same difficulty financing it.

“If I was to turn around and sell it to my son he can’t buy it,” she said. “I’ve had two wise people in the industry say that he wouldn’t have a hope in hell of getting insurance.”

Casson has heard of other people that have had similar problems financing trailers.

And it isn’t for lack of trying, she said.

“The bankers and the lawyers, these guys have just been trying so hard.”

By sharing her story, Casson hopes that it might stop someone else from falling into the same catch-22.

In the meantime, she’s weighing her options.

“Maybe I have to pull that trailer off and sell it as naked land,” said Casson.

The situation has left her both bewildered and angry.

“How on earth can you say that a property is worth $300,000 if I can’t flippin’ well sell it?” she said.

Contact Josh Kerr at

joshk@yukon-news.com

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