Homeowners in Île-Bizard 'panicked' after Desjardins cuts mortgages in some flood zones

Homeowners in Montreal's Île-Bizard–Sainte-Geneviève borough say Desjardins is making a big mistake by no longer providing mortgages for people in some flood zones.

A large part of Île-Bizard and Île-Mercier are included in those areas, which were heavily flooded in both 2017 and 2019.

Desjardins said the risk is too high to continue offering mortgages to homes that have a five per cent chance or more of flooding each year, with some exceptions.

For example, buyers of properties whose sellers already have a Desjardins mortgage can still get financing up to 65 per cent of the loan if the house has proper protection measures in place.

Homes in those zones are usually uninsurable for loans or damage caused by flooding.

"The impacts of climate change, including water damage, are growing in importance and causing substantial damage," Desjardins said in a statement.

But residents say the credit union should have levelled with its customers first and found other ways to protect homes, such as offering a loan to install flood prevention measures like embankments.

"If we decide to live by the water, it's a choice. We're not idiots, we recognize the risks, we recognize what we're getting into," said Simon Hobeika.

"This is a lifetime dream for a lot of us and a lifetime investment." 

Some residents are "panicked" that their houses will lose value, said Pier Luc Cauchon of the Regroupement des sinistrés, a support group for flood victims in Quebec. He worries other banking institutions will follow suit.

"It's making a decision that hurts people," he said. "It's 2024, almost everyone has a mortgage on their house, it's a necessity."

Doug Hurley, the borough mayor, says it will create "greater hardship" for his residents.

"The homes will go for lesser value because there's less buyers trying to buy a property, it's as simple as that," he said.

The effects of climate change are unpredictable and municipalities should be working to prevent their residents from becoming flood victims, though that takes funds, said Hurley.

He's hoping all levels of government can negotiate with Desjardins and other banking institutions to find a better solution than just cutting them off.