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Mortgage Broker News | 10 Feb 2014, 07:56 AM Agree 0
One industry player is calling on the mortgage insurers to make a list of red-flagged properties available to mortgage brokers and Realtors, after a deal fell through in the 11th hour.
  • John Hamilton | 30 Jan 2014, 08:41 AM Agree 0
    Agreed!
  • MP | 30 Jan 2014, 08:54 AM Agree 0
    Hopefully the client didn't remove subjects because you thought the property was a good one! I think such a list would be good. It would be good to include houses that are also non insurable.
  • Diane | 30 Jan 2014, 09:15 AM Agree 0
    Agreed @MP!
  • Anthony C | 30 Jan 2014, 09:17 AM Agree 0
    I agree that a list or online portal indicating unacceptable properties should be made available to the general public...

    However, the subject story itself may have been too eagerly edited for content...

    Did the deal get approved after the Pre-Approval was issued or not...? And if it was approved, what about conditions precedent, such as Status Review and Title Search?

    How could it fall apart at the "11th hour"...would a closing lawyer have not already followed Instructions as set out by the Title Insurer and Lender that the Status Certificate was reviewed and accepted, well before funding..?

    I've been there myself with a few deals on condo units inToronto, but the deals never got to final Funding Instructed because of the negative information after Status review...

    Either this story was too light on details or somebody representing the Buyer goofed up...
  • Gunther K | 30 Jan 2014, 10:14 AM Agree 0
    This used to be the norm. CMHC kept track of flagged properties, mostly condos, that had either legal issues, construction deficiencies or reserve fund issues. Don't know why they abandoned this practice. Perhaps it was the requirement and reliance on Status Certificates. But those don't always tell the tale either. Now it is not only condo's but grow ops too that would be on this list.

    Ministry throws around phrases like 'Best Practices'. Perhaps the requirement of Insurers to maintain a list of flagged properties and making it available to industry professionals would fall under that heading.

    I would be concerned about making it a public list as it may create a legal problem if the issue was minor in nature such as a frivolous law suit which must be declared in a Status Certificate. Such 'flagging' could have a negative impact on a property value and an owners ability to sell at fair market value
  • CM | 30 Jan 2014, 10:57 AM Agree 0
    This is a great idea. property Disclosure documents are not always completed as accurately as they should be and if it's a court ordered sale or the property is a rental or non-owner occupied, disclosure documents are not required.
    The same goes for the having a comprehensive list of properties that have been flagged for marijuana or other drug operations, which financing is hard to find for. We should have access to information so that buyers are making informed purchasing decisions and choosing good investments.
  • Sudershan | 30 Jan 2014, 11:08 AM Agree 0
    Agreed
  • PW | 30 Jan 2014, 12:15 PM Agree 0
    We are seeing this a lot, does not matter the age of the building.
    I always insist on a financing condition even though it seems safe. I always call CMHC or Genworth to make sure they will lend on the property- takes 2 minutes
  • Paolo Di Petta | dipettamortgage.com | 31 Jan 2014, 01:17 PM Agree 0
    I think the other story here is that condos aren't all they're cracked up to be.

    Everyone likes to tout the "low maintenance" aspect of it, but when the condo corp can take out a $2M loan which massively affects the cost and marketability of the units, it's debatable whether you can actually enjoy that time, or whether you need to spend it working to recoup those losses.
  • Naveen | 07 Jul 2016, 09:30 AM Agree 0
    I am a first time home buyer looking for a condo in toronto. I was guided by a salesperson from a registered brokerage office to sign a firm deal on a property in Scarborough location. I had no condition on finance as I got pre-approval from one of the big bank. I waived the status certificate after reviewing with lawyer saying no concerns. Also I did a deposit of $10000.

    While processing my mortgage application bank identified the condo building itself was under do not list because of former grow op. My broker and lawyer advised me to approach other banks as well but am sent back for the same reason. I tried with the mortgage broker as well but no luck.

    The listing agent says that he is not aware of any such issues and he doesn't care if there was an grow op on the building common area. When I did a quick search in the Google I got to know this was a big news in 2010 as condo staff were involved in the operation.

    The broker of record is not ready to discuss the next steps with me as he claims the issue is at the listing agent end and they don't have any responsibility to research the matter for me.

    We also have a clause in the purchase agreement that the seller represents and warrants for any illegal growth of substance in the property and the building and the structures etc.

    Currently my broker and lawyer is saying they are discussing the matter with the seller lawyer to get money back but they are not much positive about it.
    My lawyer is advising to file a lawsuit if they don't agree to return the deposit.

    I cannot handle any legal expenses to fight back for my money. I have no clue how to deal this issue.
  • Dave | 07 Jul 2016, 10:16 AM Agree 0
    Paolo said it best. There is so much BS behind the scenes with these "Luxury" condos (aren't they all advertised like that now?) lol. Buyers have no clue what they are getting into.

    Can't wait for the news 5 years from now after all these condos went up so quickly in the GTA with no quality control behind them. Gonna be some ugly stories of special assessments.

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