Son Of A Broker » Arnold Molder

Files Of The Broker: Property Tax Arrears & Judicial Sale

chris — Thu, 22 Jul 2010 14:12:50 +0000

The consequences of not paying property taxes are not well appreciated. In my last blog entry I explained the term Judicial Sale and highlighted that this legal process is a great opportunity to acquire undervauled properties in cottage country. More often than not the cause is the non-payment of property taxes.

The other day we received a phone call from a solicitor to help resolve a legal action initiated by a municipality to collect tax arrears. The owner of this very attractive rural property was one week away from being evicted by the sheriff. Specifically, he owed the municipality five years of property taxes plus penalties, interest charges and legal fees.

Burying his head in the sand in ostrich-like fashion he simply ignored the mail, evidenced by a pile of unopened letters. He came dangerously close to loosing his property before we intervened on his behalf with a private mortgage on his otherwise mortgage free property.

This episode illustrates a lot of leniency and patience by municipalities toward property owners before they finally resort to the cumbersome legal process of judicial sale. Keep in mind that properties are an important source of tax revenues necessary to pay for municipal services. When default occurs on an otherwise debt free property, the government turns to the public with the announcement of their intended judicial sale and rewards the highest bidder with conveyance of ownership. The new owner assumes the obligation to pay property taxes and, hopefully, keeps payments up to date.

If you are interested in cottage country properties this may be an opportunity worthwhile exploring. One of our private investors purchased a small island of Georgian Bay in this way.

If your property taxes are currently in arrears and would like to finance them through a private mortgage or you are a private investor who would like to explore these and other opportunities please give me a call to discuss. Arnold Molder 416.461.0204 Dedicated to financial sufficiency.

Files Of The Broker: What Is A Judicial Sale?

chris — Wed, 14 Jul 2010 18:52:43 +0000

In my last post I wrote about an astute investor who exploited the opportunity of a Judicial Sale when he bought a unique, mixed-use property, for a bargain price of under $100,000. Such opportunities come up frequently but are missed by most people because they don’t know where to look specifically. In addition, the term Judicial Sale is not part of the everyday vocabulary and opportunities are missed.

The term judicial sale is a legal notice informing the public of an intended sale of a property to the highest bidder, in an auction environment by a sheriff. The reason for a judicial sale is most commonly for arrears of property taxes owed to a municipality.

The action of resorting to a Judicial Sale occurs only after a municipality has failed to collect tax arrears from the owner, and all other methods of suasion have also failed. In other words, a Judicial Sale is the final legal act to obtain these arrears through a property sale to the highest bidder.

Such notices appear typically in the newspaper column under legal matters/auctions.

Notices of smaller communities and municipalities, especially in cottage country, offer greater opportunities for investors. The first reason is that due to population numbers, there is a smaller interested audience than in a city. Secondly, it requires special geographic knowledge. Finally, it takes a lot less money to be a successful bidder.

If you are patient and interested in cottage country properties, this may be an opportunity worthwhile exploring. One of our clients, a couple, purchased a property for summer vacations under Judicial Sale on Prince Edward Island, where they grew up.

Granted, the pursuit of Judicial Sales opportunities requires effort, but it can be a rewarding experience.

It is highly unlikely in these situations for a Bank to be your financial partner. More often than not, such situations require private mortgage financing and backing of an experienced mortgage broker.

From the Files Of The Broker: Arnold Molder 416.461.0204

Files Of The Broker: Oddball Property Private Mortgage Financing

chris — Wed, 30 Jun 2010 16:39:56 +0000

What do you get when you try to buy a property that was once a jail, fire hall, dance hall & town hall? A financing conundrum.

This is exactly what one of our clients purchased, where we provided private mortgage financing. The purchase is even more remarkable when you consider that the jail, fire-hall, town-hall and dance hall are joined as one property, on one deed.

The property has an interesting history going back to the early days of Ontario, when towns sprung up around employment opportunities of budding industries. The property is located in a small sawmill town, along a railway line, and developed to serve the needs of the town’s people. Construction of the town-hall was considered for obvious administrative functions with an office on the ground floor, town hall and stage on the floor above to function not only for meetings, but also on weekends for dances, theatre and other festivities.

The fire-hall evolved from the voluntary fire brigade of citizens who were ready to spring into action when needed. But the jail is more intriguing and amusing. Crime was not a big problem but there were plenty of people who liked to have a good time with alcohol. When they became a nuisance they were simply put up for the night in the specifically constructed cell, adjacent to the office on the ground floor. It has three-foot-thick walls of field stones and a solid, heavy wooden door, making escape virtually impossible and muffling any sound such as singing from the intoxicated revelers.

Over the years the building became redundant, not for lack of drunks, but through amalgamation of administrative functions and services with a nearby, larger town.

In time the building deteriorated and was in need of maintenance and upgrading for which there was no money in the budget. In addition the lack of income, via property taxes persuaded the Town to sell via a judicial sale.

Our handy purchaser obtained the entire property, bounded by a park on two sides, for less than $100,000 when it was offered for sale to the highest bidder. He now lives there happily after renovating and restoring the property extensively with ‘sweat money’ and converted the jail into a wine cellar.

Such situations require private mortgage financing not only due to the zoning but also in circumstances of judicial sales. Because we are over 30 years in business as mortgage brokers we have come into contact with many situation that require private mortgage financing. Over the years, we forged long term relationships with private investors who approach lending, besides concerns over security, with a lot of common sense.

This story serves to illustrate our pivotal broker-role in transactions. Furthermore, it shows how borrowers can benefit from our experience and connection with private mortgage investors with whom we have developed, over the years, trusted relationships.

If you are a private investor looking for opportunities to invest, or a borrower needing help with your own unique and challenging circumstances, we invite you to call us with your story.

From the “Files of the broker”

Four Years. Go.

chris — Wed, 21 Apr 2010 02:42:28 +0000

This past weekend the Mortgage Broker (Arnold Molder) took his son (Christopher Molder) to Boston to attend The Global Sufficiency Summit. It was truly an eye opening and unforgettable experience which I will be blogging and talking more about over the coming weeks and months. There is so much that we would like to share about the concept of sufficiency and how it relates to personal finance and mortgage financing.

At the conference we were introduced to the “FOUR YEARS. GO.” campaign. FOUR YEARS. GO. is a global communication and awareness campaign to energize a worldwide movement of imagination, enthusiasm and action to shift humanity to a sustainable, just and fulfilling path by 2014. Individuals, organizations and businesses are coming together under this campaign to make a pledge to achieve by 2014. Stay tuned for our pledge here at Tridac -The Mortgage Centre. If you are learning about the campaign for the first time, I invite you to visit www.fouryearsgo.org for more information.

Click here to view the embedded video.

Fixed vs. Variable: The Train Is On The Tracks

chris — Thu, 11 Mar 2010 15:00:05 +0000

Do you remember when you were a kid and you stood on the train tracks on a hot summer day peering into the distance for the coming train? Then suddenly, in the distance, a single light appeared suspended in mid air and the shape of a massive train hurdling towards you sent your heart racing. It was the ultimate game of chicken. How long could your nerves last before you had to step off those tracks and into safety?

While mortgages are nowhere near as exciting as that childhood thrill, we can draw a parallel to the game of chicken and staying in a variable rate mortgage today. Current economic data indicates that the era of historic low interest rates may come to an end promptly and it is advisable to reassess your mortgage to determine if it is time to lock in.

Currently it is possible to lock your variable rate mortgage into a 5 year fixed at a rate anywhere between 3.89-3.99%. The train is on the tracks… what will you do?

Mortgages are very dynamic and the guidance that we offer is based on the circumstances of each individual. If you would like to review your mortgage to make sure that you are still on track please call us to have a quick chat. 416.461.0204

Chris Molder – Son Of A Broker

What Does Term Refer To In My Mortgage Contract?

chris — Fri, 15 Jan 2010 03:26:55 +0000

There is no such thing as a silly question. Especially when it comes to your mortgage and money! As a mortgage broker I sit down and work with a lot of borrowers, some have a very high level of financial literacy and others never had the opportunity or need to learn. Arranging a mortgage on your home along with being a necessity should also be an educational experience.

When you arrange a mortgage on your home with a lender you are entering into a contract with the lender. Term refers to the length of time that the mortgage contract is effective for. For the term of the mortgage both you and the mortgage lender are obligated to honor the conditions and terms as set out by the mortgage contract. Most mortgages in Canada are arranged for 5 years at a time, however there are mortgages with terms from 6 months all the way up to 10 or 15 years and beyond.

During the term you are making 4 promises to the lender, otherwise known as covenants:

1- You promise to keep up with the mortgage payments

2- You promise to keep the property taxes up to date

3- You promise to keep the property in good repair

4-You promise to keep sufficient insurance coverage on your home

This is not a one way street though, during the mortgage term the lender is also making promises to you:

1- They give you ‘quiet and uninterrupted possession’ of your home

2- They cannot change the agreed upon interest rate during the term

3- They cannot demand that you repay your mortgage before the term expires (unless you break one of your promises)

Most mortgage lenders will allow you to break the mortgage contract before the term is up. This is where the penalty comes in. The majority of mortgage contracts are written so that the penalty is the greater of 3 months interest or the Interest Rate Differential (IRD). I could write a whole post on what to look out for when it comes to IRD. NOTE: Be wary if you are offered a low interest rate that is too good to be true because that is a sign that your mortgage may not be ‘breakable’ and you will be handcuffed to the lender until the term expires or you will have to pay them all the interest that you would have paid them over the term of the mortgage.

What happens at the end of your term you may ask? If you are a good client to the mortgage lender and pay them consistently over the life of the mortgage they will be happy to extend a mortgage renewal to you to enter into another term with them. This is an important juncture in the life of your mortgage because it represents an opportunity for you to refinance, move or paydown or off your mortgage with no interest penalty. It also represents a good opportunity for you to negotiate a lower rate or switch lender. Amazingly 90% of Canadian homeowners take the posted rate renewal offers their banks send them and pay more then necessary in interest.

If you are frustrated or confused about mortgage financing and looking for a guide with patience and who really understands the ins and outs of the business contact…

Chris Molder – Son Of A Broker

Licensed by the Financial Services Commission of Ontario under Lic#M08010066

Monday Mortgage Minute January 4th 2010

chris — Tue, 05 Jan 2010 04:01:31 +0000

Toronto Mortgage interest rates for the week of January 4th 2010. Happy New Year! As of today lenders have given us a fair warning that fixed interest rates will be rising this week. Already we have seen one lender jump their fixed 5 year from 3.99% to 4.44%. In order to secure your low fixed rate call me or e-mail right away!

1 year fixed – 2.65%

3 year fixed – 3.29% (must close before March 31st 2010)

5 year fixed – 3.99%

3 year variable – Prime-.10% (2.15% effective rate)

5 year variable – Prime-.20% (2.05% effective rate)

RATE SPECIALS

5 year fixed – 3.89%

3 year variable Prime-.25% (2.00% effective rate closing in 30 days, purchases & refinance only)

Click here to view the embedded video.

NOTE: Rates are subject to change without warning at the lender’s discretion.

Monday Mortgage Minute – Dec 21st, 2009

chris — Mon, 21 Dec 2009 16:59:24 +0000

Toronto Mortgage interest rates for the week of December 21st. Interesting to note that during a week that is traditionally calm in the markets there was another rise to the 5 year bond yield. I’ll keep an eye on further developments during the week to see how fixed rates will be effected.

1 year fixed – 2.60%

3 year fixed – 3.29% (must close before March 31st 2010)

5 year fixed – 3.99%

3 year variable – Prime-.10% (2.15% effective rate)

5 year variable – Prime-.10% (2.15% effective rate)

RATE SPECIALS

5 year fixed – 3.89%

3 year variable Prime-.25% (2.00% effective rate closing in 30 days, purchases & refinance only)

Click here to view the embedded video.

To get in touch with me send me an e-mail or call 416.461.0204 ext 2.

Christopher Molder – Son of A Broker

Licensed by the Financial Services Commission of Ontario under Lic#M08010066

What is a Private Mortgage? Ask a S.O.B

chris — Fri, 11 Dec 2009 20:50:11 +0000

This week’s question is in regards to the various post we have online regarding Private Mortgages in Toronto.

What is a private mortgage?

Private mortgages are a special and very interesting type of mortgage option that most people are not too familiar with. The most basic definition of a private mortgage is a mortgage contract in which the lender is not a registered financial institution but may be a friend, family member or individual investor.

Because banks and other financial institutions have strict guidelines for lending that limit their ability to finance certain scenarios and borrower profiles, private mortgages are used to meet those unique needs. Some typical situations where a borrower may need private financing include:

-Financing for a cottage or unique property

-Financing for renovation projects and construction

-Financing for an individual who can’t prove their income by conventional means

-Financing to consolidate debt or recover from a bankruptcy

-Financing for individuals who have income tax or property tax arrears

There are several benefits to the borrower and investor alike in this type of mortgage arrangement.

From the borrowers point of view, private mortgages can be an excellent alternative when a suitable bank mortgage is impossible to obtain. Reasons why a borrower may require a private mortgage include; need for a second mortgage, poor credit, income tax arrears, tax arrears, construction financing, financing on properties that institutional banks may not consider prime, cases where an individual has recently gone bankrupt or just can’t prove their income. A private mortgage should never be a long term strategy for a borrower, as the interest rates tend to be higher and do not always have the features and flexibility that institutional mortgages offer.

Anybody can lend money through a mortgage. You don’t have to be a bank to lend money, it is possible for anyone to offer a private mortgage so long as it is arranged through a licensed mortgage broker in Ontario. Private mortgages are a great investment vehicle which provides monthly income. In addition, mortgages are negotiable instruments which can be assumed, renegotiated, and transferred as needed. All the while the investor is protected by the security of the real estate on which the mortgage is registered.

Regardless of whether you are a borrower or an investor a knowledgeable mortgage broker who is specialized in private mortgages is necessary in order to arrange the mortgage and also provide the guidance needed to make informed decisions. If you would like to connect with a real expert in the area call the father of the S.O.B, Arnold Molder at 416.461.0204 ext 1. He has been arranging and managing private mortgages for the past 30 years!

DISCLAIMER: please note the purpose of this post is to inform. I am in no way offering investment advise, please consult with your investment adviser.

Private Mortgage Money Toronto

chris — Sun, 29 Nov 2009 22:03:36 +0000

Meet the father of the S.O.B as he invites those seeking specialized private and second mortgages in Toronto to call him.

Click here to view the embedded video.