Over $1 billion in investors’ funds have been lost in syndicated mortgages across Ontario, a Toronto real estate lawyer stated.
The warning came on the heels of a recent CBC News report detailing the fate of investments made by more than 120 Chinese in the GTA. The foreign nationals are expected to lose upwards of $9 million in contracts with Black Bear Homes.
“This is the smallest one I’ve ever seen for these type of deals,” Franklin said, noting that the deals are fraudulent based on court documents.
The same documents stated that investors in syndicated mortgages with Black Bear Homes were led to provide mortgages at a higher cost than the actual worth of the investment properties
. In addition, the financiers were given their interest payments back from their own capital.
Previously, other companies selling syndicated mortgages have been closed down by authority of the Financial Services Commission of Ontario (FSCO). In October 2016, Tier 1 Mortgage Corporation was issued a cease-and-desist compliance order by FSCO.
Additional syndicated mortgage claim filed
Widespread mortgage fraud helps people buy homes - agent