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Mortgage Broker News | 06 Apr 2016, 08:15 AM Agree 0
A continuous growth in syndicated mortgage sales volume reflects the increasing popularity of this arrangement in Canadian condo markets, according to an analyst who questions the safety of these investments
  • Mike | 06 Apr 2016, 09:32 AM Agree 0
    This so reminds me of the limited partnerships of the 80's and 90's but they only carried commissions of 4%, alot of people lost alot of money. I have seen 8% commissions paid on syndicated mortgages. Any product that has to pay huge commissions to get it sold must be very very risky. This whole area is just waiting to blow up and when it does it will tarnish the whole industry. If a company, building a condo or a medical center is so badly capitalized that it is willing to pay that much for its money you know they will walk away from a deal that goes sideways pretty fast, in fact they won't have a choice. These things are being sold as a secure investment to GIC holders by very unqaualified salesmen. Going to get ugly.
  • Ron Butler | 06 Apr 2016, 10:44 AM Agree 0
    I think that there is nothing wrong with the basic concept of syndicated mortgages: small syndications occur everyday, three brothers do a second on single family detached, Mom and Dad and one son do a private first on a commercial condo, on and on. Simple, easy for everyone to understand mortgages.

    The problem is massive, multi-million dollar syndications of soft cost on construction projects. No matter how good a job the mortgage brokerages do about disclosure there is simply a different element of risk attached to these syndications and those projects should not be handled by mortgage brokers and agents. Those projects need to be handled through securities licensed organizations.

    Here is simple proposal for FSCO: put a moratorium on all syndications over $2 Million.

    Just freeze this multi-million dollar sales activity TODAY and wait until further study is finished and a total redesign of the rules around large syndication are completed. I think it is important for the public good and it will also protect our whole industry.
  • Evan | 06 Apr 2016, 10:50 AM Agree 0
    ALL investments bear risk and so long as that risk is disclosed and the client is given adequate information from which to make a decision, I see nothing wrong with this as another investment vehicle.

    There are far more risky investments out there, and far safer.

    The people who nay-say this investment... a question... do you hold the same view for the stock market? Mutual funds? Both of these investment vehicle are very high risk... the latter has been proven to be a huge loss leader for the investor. While the first has proven many times to be the source of millions of people's financial ruin.
  • John Meredith | 06 Apr 2016, 11:43 AM Agree 0
    Builders with limited experience and very little equity are given syndicated mortgages to over 100 % of projected value with soft costs being inflated.Several builders have gone bankrupt, projects are then
    re-syndicated at higher fees and rates. We had a bad situation in the 1980's and early 90s called murbs, mostly sold to Doctors. The properties were sold for 20% or more then the market value simply because it was tax right off. These properties sold in early 1990s for 50% less then even with registered mortgages, not a total loss as will be the case with syndicated mortgages which could end up a total loss and families life savings gone.The investor in a syndicated mortgage has very little options.
    This is a nightmare waiting to happen.
  • Victor Simone | 06 Apr 2016, 01:44 PM Agree 0
    In support of comments by Mike: You sir, are just the type of person I would want managing my money. I agree, and it's not because we are negative or ultra conservative investors. When things go bad the folks that lost money always sing the same song "It was almost too good to be true."
  • Francis | 07 Apr 2016, 12:03 PM Agree 0
    I know little about syndicated but I have sat through a meetings. Let's hear from someone who actually knows syndicated mortgages. The comments thus far are clearly from those unfamiliar with this type of investment and/or looking to build upon their own and rid the industry of competition. For Mike to comment that these developers are badly capitalized, try telling that to Brad Lamb; face to face.
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