Tag: mortgage
Registering a Notice to try and save a Power of Sale
Often, borrowers loosing their home to a power of sale will take any advise they can get to stop the process. Borrowers are sometimes led to believe that if you register something on title to the property that you can possibly thwart the lender’s ability to physically transfer it. As with most registrations on title if it has nothing to […]
Read moreChanges to the Mortgage Syndication Rules
As of July 1, 2018, the Financial Services Commission of Ontario (FSCO) will begin enforcing the changes to the O. Regulation 188/08 Mortgage Brokerages Standards of Practice under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA) that affect non-qualified syndicated mortgages.To recap a qualified syndicated mortgage is a syndicated mortgage (a mortgage where there is more than one lender) that meets ALL of the following requirements:A licensed mortgage brokerage was involved in negotiating or arranging it.The mortgaged property secured was:Primarily used for residential purposes;Did not contain more than four (4) dwelling units (remember sometimes lenders will classify multiplexes as commercial or entirely residential depending on the number of dwelling units disregarding actual zoning and use);Did not contain more than one non-residential (commercial) unit, if within a mixed use building with other residential units (again up to four (4) in total).
Read moreIslamic Financing and Riba Free Mortgages
Over the last few years, and especially since the financial crisis of 2008, the concept of Islamic financing or banking has been gaining momentum as an alternative financial model for lending and banking. In the UK for example, since 2013, there has been a wider acceptance of this model of financing, and in fact there has been a wide push by the government for the creation of Islamic compliant investment opportunities, both for the domestic market’s consumption, and as a means of attracting foreign investment in the UK financial market.Here in North America the model has garnered some attention, and in fact currently there are few lending companies that offer Islamic compliant financing options, however the model has not been seen as attractive enough or in demand enough to be created and offered as a product.The attraction to this model of financing and banking is primarily due to the fact that Islamic financing puts emphasis and operates on the notion of shared risk between the lender and the borrower, as oppose to the traditional western style banking and financing. That is why this model garnered more attention after the financial crisis of 2008.
Read moreCan a borrower redeem their mortgage under power of sale?
The answer to this question is constantly evolving, with new and conflicting case law addressing specific facts released almost yearly. The old adage of being able to redeem your mortgage (payout your mortgage) during a power of sale proceeding so long as the mortgagee in possession (being the seller) has not yet entered into a firm or unconditional agreement of purchase and sale with a buyer is no longer clear cut.Today the way I understand it is that there are two issues once the mortgagee in possession (being the seller/mortgage lender) enters into an agreement of purchase and sale with a potential buyer, and whether or not the borrower/mortgagor can still redeem (payout) his mortgage and keep his property:Agreement of purchase and sale has conditions that must be satisfied prior to the agreement becoming “firm”; and
Read moreMICs: The Technical Aspects of a Mortgage Investment Corporation
TYPE OF ENTITY FOR A MORTGAGE INVESTMENT CORPORATIONA Canadian Corporation throughout the taxation year where its business only undertakes to invest its funds, and thereafter qualifies as a MIC, is deemed to be a public corporation under the ITA, and therefore must have its financials audited. Depending on which province your MIC is registered, it will have to comply with securities legislation in that province;Depending on which province your shareholders or investors are, it will have to comply with securities legislation in that province;TYPE OF ACTIVITY & INVESTMENT/ASSET BASEMortgages secured against real estate in CanadaMortgagors can be individuals or corporateMortgagors can be Canadian non-residents
Read moreCan a lender charge a mortgage pre-payment penalty under Power of Sale proceedings or once the mortgage term has matured, regardless if it is an Open or Closed Mortgage?
Under section 17 of the Mortgages Act, and pursuant to relevant case law the answer is “Yes” the lender can. Subject to the wording in the original mortgage commitment/agreement, you will often find that lenders will charge 3 months interest pre-payment penalty if they have to enforce the mortgage via a power of sale proceeding or if you neglected to renew the mortgage once the term has expired and have failed to pay the lender out (within the time allotted pursuant to the lender’s notice). Also, often enough, the original mortgage commitment/agreement will have qualified wording for “Open” mortgages stipulating that so long as the borrower is not in default, the borrower will be able to pre-pay the mortgage in whole or in part without a penalty or bonus. However, once in default, a lender can demand the penalty payment of three months’ worth of interest calculated on the then outstanding principle balance, even if your mortgage is an Open one.In relevant case law the courts have often ruled in favor of the lender on disputes over its right to charge penalties pursuant to section 17 of the Mortgages Act, where the borrower was found in default of payment of any principal or interest money.
Read moreReal Estate Law: Closing a Real Estate Transaction
Choosing a closing date The closing date can be whenever the parties agree upon, however selecting a closing date on a weekend or statutory holiday will prevent your transaction from being registered because the land registry offices and the electronic registration system are unavailable. If parties so choose to close on those days, alternative arrangements such as closing in escrow can be made with caution. Other days such as the last day of the month or Fridays are typically very busy for real estate transactions for various reasons such as having the weekend to move in and concluding payment cycles. Therefore, if possible, avoiding those days may be prudent especially if someone is planning on selling and buying on the same day.
Read moreIssues in Mortgage Law
Foreclosure: When and Why?It is not uncommon to combine a claim for foreclosure with a claim for the amount due under the covenants contained in the mortgage. Thus, an action for foreclosure is for the recovery of the mortgaged property itself and is a means by which the mortgagor’s equity of redemption is ended, so that the mortgagee may realize on the security without later having to justify the sale price or to account for the sale proceeds.In Toronto, and quite a few other jurisdictions in Ontario, the foreclosure process takes place as a reference pursuant to Rules 54 and 55 of the Rules of Civil Procedure. Besides this, Rule 64 has specific application to foreclosures and sale actions. When a choice is made between power of sale or foreclosure, there are several issues to consider. Such considerations are: whether the mortgagee is an institutional or private lender; whether there are any subsequent encumbrancers or execution creditors and whether they are private or institutional;
Read moreMortgage Enforcement: What Can Go Wrong?
Notice of Sale and RequisitionsIf a purchase is made under power of sale, it is necessary to ensure that the vendor is authorized to conduct the sale and that the power of sale proceeding has been properly commenced. A requisition, in this respect, by purchaser’s legal counsel is expected to bring forth a statutory declaration attaching evidence of service of the notice of sale. The usual practice is to attach to the statutory declaration evidence of service of the notice of sale by registered mail, including the registered mail receipts. The Court of Appeal ruled in CIBC Mortgage Corp. v. Chopra that service by registered mail to the address provided for in the mortgage would be quite adequate for the purpose.Typical Schedules to APSVendors of properties under power of sale more often than not include a schedule to the agreement of purchase and sale which significantly alters the usual terms of a sale/purchase transaction.
Read moreMortgage Enforcement: Issues for Discussion
IntroductionCommon issues expected to arise and confront legal counsels in mortgage enforcement practice, whether from the mortgagor’s perspective or from the lender’s perspective are under discussion here. Divided into ten sections, each of which addresses a discrete point, the purpose is to assist counsels in identifying the relevant issues, the common problems, and the usual solutions.Entitlement to 3-Months InterestAccording to Section 17(1) of the Mortgages Act:“Despite any agreement to the contrary, where default has been made in the payment of any principal money secured by a mortgage of freehold or leasehold property, the mortgagor or person entitled to make such payment may at any time, upon payment of three months interest on the principal money so in arrear, pay the same, or the mortgagor or person entitled to make such payment may give the mortgagee at least three months notice, in writing, of the intention to make such payment at a time named in the notice, and in the event of making such payment on the day so named is entitled to make the same without any further payment of interest except to the date of payment.”
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