Any of Tridac – The Mortgage Centre’s clients know exactly what my connection to piggy banks is. If you’ve done business with us then you no doubt have received one of our cute little piggy banks as a ‘thank you’ gift after closing your mortgage.  The significance of the piggy bank runs deep in our family business as a metaphor for savings and the building of equity in your home. My Dad has been using piggy banks for years and the apple hasn’t fallen far from the tree as evidenced in our most recent company portrait below.

Piggy banks and cute closing gifts aside, the glue that binds together any successful relationship business like our mortgage brokerage, is a solid client relationship management system or CRM in industry terms. I rely on British Colombia based CRM provider GoMax Solutions for the tools and systems that allow me to provide the personalized service that my clients have come to expect and enjoy from me.  Earlier this month GoMax ran a Facebook contest asking mortgage agents and brokers to share their best marketing ideas. I shared our Piggy Bank idea below and won the $100 prize!

Upon successfully closing a mortgage with any of our clients, we send them a very attractive looking piggy bank and message along the lines of “like a constantly dripping faucet will eventually fill any vessel, the accumulation of small amounts of money will amount to significant savings over time.” The piggy bank and savings then become a topic of conversation throughout our various touch points throughout the year. GoMax has made the management of these touch points so easy. On our client’s birthday we send them a card with a brand new shiny loonie. We use the piggy bank as a metaphor for equity in a client’s home and use it to show how small changes to payment habits can result in major savings over the life of the mortgage.

Whether you are a first time home buyer shopping around for a mortgage or you already have a mortgage and are looking to see what else is out there, I invite you to give me a call 416.461.0204 or fill out the contact form below. Not only will you get  personalized attention from experienced brokers (checkout our client testimonials) but you’ll also receive great rates, unbiased advice and your own little piggy bank and all of this for free! Why for free? Because as a mortgage broker I get compensated through the bank by a finder’s fee so our service doesn’t cost you. I look forward to hearing from you.

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There’s seldom an occasion during which we can sit back and contemplate time gone by and time to come. Thank goodness we mark each calendar year with a definite beginning and end. This gives us a formal opportunity to reflect, reset and plan ahead.

2011 was another fantastic year at our brokerage Tridac Corporation Ltd – The Mortgage Centre. It was also another year of learning and evolving. After 34 years in business, there’s still so much to work on and improve. When my dad started our brokerage there wasn’t a computer in sight, whiteout was always in stock and the typewriter was a modern piece of equipment. This past year, technology was again at the forefront of our growth as we evolved our brokerage into a fully social business.  With the help of my brother Mark we took another serious look at social media. Actions included revamping our website, again, adding a Son Of A Broker – Facebook page (please become a fan we only have 28 likes – Mark thinks that’s pretty weak), joining the conversation on Twitter, and learned that Linkdin really isn’t that social. I’m not too sure why we are on Google+ but I figure it’s good karma or something like that (I know you’re reading this Google). We have a Google Places page and even have legit reviews about our business! I also redesigned this very blog in mid 2011 as the previous version was so 2010.

Our clients will be happy to know that in late 2011 we integrated new customer relations software which will improve your experience with us. Features include an annual phone call from yours truly and enhanced communication to notify you of any changes that would affect your mortgage.  We’re also in the process of setting up an online debt management system designed as an easy to use budget tracker. This system will not only help you determine where your money is being spent but more importantly assist you to get out of debt and pay down your mortgage as quickly as possible.

To our new and old clients who have made 2011 a great year thank you for your business and support. My dad and I truly appreciate the opportunity to help you with your mortgage financing. At risk of making this sound like a post scribbled in a year book I’d also like to use this opportunity to shout out to a few colleagues, partners, and friends who have made this year fun and taught me a lot: Mark Savel, savelblogs.com; Kerri-Lynn, Brennan & Alyssa  Ratehub.ca; Kevin Tuttle, ChrisClarketeam.com; Joy Paterson, condochicks.com; The Bhandari brothers, talkcondo.com; Matt & Cliff, BuzzBuzzHome.com; Geoff Charkow, MerixFinancial; Tony Olivera, Remax; and Brian Persaud, urbantoronto.com.

Best wishes for continued success in 2012.

Christopher Molder – Son Of A Broker

The failure to pay property taxes and resulting consequences are not always well appreciated.

Earlier I reported how we saved a homeowner from falling into the hands of the municipality through the Sheriff. The legal action, initiated by a municipality, was over failure to pay property taxes.

The owner of this very attractive rural property on the Oak Ridges Moraine, near the Dagmar Ski area, owed the municipality five years of property taxes plus penalties, interest charges and legal fees. 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 with a $40,000, private mortgage on his otherwise debt free property. We had established a market value of $150,000 which provided us with a comfortable equity cushion based mainly on lot value. A fire had previously destroyed a very old farmhouse leaving only the foundation.

Much to my surprise, the owner recently called to request a discharge of mortgage. The brush with the Sheriff had alerted him about realizing the potential value of his property where he had boarded horses and wolves (Yes, wolves!). When he discussed with his neighbors his intention to return to Germany, he received two competing offers, within a day. In the end he accepted an offer for $495,000. He mentioned that it was probably worth more but being a good-natured neighbor, and counting his blessings, he was satisfied with the price of his private sale.

What made the property so valuable was the ruling that, although the farmhouse had burned down and building permits are no longer issued for construction of homes on the Oak Ridges Moraine, his property was exempt from that ruling as it allowed for the rebuilding of a home.

Our quick intervention with private money averted a great financial loss to the homeowner because the municipality would have auctioned off the property, anonymously, to the highest bidder. Government auctions are advertised not in the regular newspapers or real estate agents. Sheriff Sales are listed mostly in the Gazette, which is read only by special interest groups. Very likely, the neighbors would not have even been aware that the house was auctioned off.

Our appraisal made me aware of the hidden value in that the property retained it’s grandfathered building permit. I am pleased over the turn of events. The 12:1 return on mortgage debt had a happy ending. It allowed the owner to return to his native Germany for retirement, with money in his bank account, and fond memories of Canada.

In previous blog entries I expanded on the term Judicial Sale with examples from our files and my own experiences.

The term Judicial Sale is a court order by a Writ of Execution and presided over by a Sheriff, to satisfy an unpaid debt in an auction environment, known as a Sheriff Sale.

It is generally perceived that properties of this nature are marginal or simply parcels of rural land or lots in cottage country. That is far from our experience.

I am happy to report that a reader of our blog acted on this information recently and became the successful, and profitable bidder, of such a property. She tracked auctions over property tax arrears via the Canada Gazette where notices are posted.

The tax sale property was a regular home in a subdivision near London, Ontario. Auctions have their own rules and regulations. For example, eligible bidders must meet the reserve bid of the court, and appear with certified funds of 20% as deposit. Only the funds of the successful bidder will be retained while deposits of unsuccessful bidders are returned at the end of the auction.

The successful bidder is given 20 days to deliver the balance by certified funds to the court. Failure to do so results in forfeiting the 20% deposit to the court. The property is then offered to the next highest bidder.

Unlike regular purchase transaction, where the purchaser can arrange financing on the property purchased, a Sheriff Sale is an unconditional, cash transaction between the bidder and the court. In the case of our client and successful bidder, we quickly provided private mortgage money from a private investor who registered a private mortgage against her own property.

It is noteworthy that under a Judicial Sale no warranties are given. The successful bidder takes over the property in ‘as is’ condition, including the owner, tenants or other liens or existing mortgages.

For example, our client acquired the unencumbered property, worth about $200,000, with a $30,000 bid. She also assumed the previous owner who occupies the property and is now a tenant. As can be readily seen, the rewards are commensurate with the assumed risks.

It is too early to report on the final outcome but I am inclined to believe that her acquisition will be financially rewarding.

I also believe, that due to the economic climate we live in, occurrences such as the examples of Judicial Sales, will increase. They provide astute investors, who are tired of poor returns and volatility in the stock market, alternative investment opportunities that traditional investment brokerages do not offer their clients.

Arnold Molder

I sat down with my Dad to talk about how an investor can invest in private mortgages. As president of a Mortgage Investment Corporation (MIC) and over 35 years of experience he has a lot of insight into the world of mortgage investments. Essentially there are 3 ways that an investor interested in mortgages as an investment vehicle can invest:

1. Invest on a one on one basis. The mortgage is written in the name of the investor and all interest payments go directly to the investor usually on a monthly basis. The caveat with this type of mortgage is that all the risk is on the investor and hinges on the quality of the real estate and the borrower’s ability to make good on the mortgage.

2. Invest in a participatory mortgage. This is where a number of investors pool their money together to invest in one specific mortgage. Each investor gets a stake proportional to their investment in the mortgage.

3. Invest through a mortgage investment corporation. This is where a number of investors can pool their money together in a fund which is managed on their behalf and is RRSP eligible. Each mortgage is written in the name of the corporation and the interest earned gets paid back to the investors through a dividend at the end of the each year. The major benefit of this style of investing is that the risk of each mortgage is spread out among the investor over the entire portfolio. This is essentially a mutual fund for mortgages.

If you are interested in mortgages as an investment and would like to explore whether they are a right fit for your investment portfolio feel free to give us a call or write us below. As mortgage brokers we often have opportunities for investors in any of the categories discussed above.

Click here to view the embedded video.

Investing in mortgages is a great opportunity that is overlooked by many investors.  There are many methods and ways to invest in mortgages.  The following is the skinny on investing in mortgages:

Click here to view the embedded video.

Why Should Someone Consider Investing In A Private Mortgage?

A mortgage is a unique investment that provides the investor with a predetermined return (interest rate), paid out on a monthly basis. Best of all, the investment is secured and backed by real estate.

Why Aren’t Mortgages Readily Available For Investors In Canada?

Most investors seek guidance and advise through financial planners who aren’t licensed to sell mortgage investments.

Where Can Investors Find Mortgages To Invest In?

The best place to find mortgages as investments is through a licensed mortgage broker. Often a mortgage broker will be able to match a borrow with an investor/lender who meets the investor’s risk tolerance.

What Type Of Return Can An Investor Expect To Receive For Their Mortgage Investment?

As with all investments, the returns are relative to the risk associated with the mortgage. An investor can expect a return anywhere between 5-12% depending on the position of the mortgage (1st or 2nd mortgage) and the credit worthiness of the borrower.

If you would like to explore whether mortgage investments are right for you, contact Arnold at 416.461.0204ext1 or email .

A second mortgage is a loan secured against real estate, that is subordinate or subsequent to a first mortgage on the same property.

If you own a home there can be multiple mortgages secured against it. The order of the mortgages is determined by who registers the mortgage first with the land registry office.  It is possible to secure third or even fourth mortgages against your property however they are rare as most lenders won’t lend you money unless there is sufficient equity in your home.

The reason a second mortgage is called subordinate is because if the mortgage goes into default, the first mortgage gets paid off before the second mortgage. It follows that the second would get paid off before the third. Because of this subordinate position second mortgage lenders require higher interest rates due to the increased risk.

Assuming a borrower stops paying or defaults on a second mortgage, the second mortgage lender can initiate a power of sale even if the first mortgage is still in good standing. The opposite is also true. A first mortgage lender can initiate a power of sale action even if the second mortgage is in good standing. Each lender has the option of purchasing or assuming the position of the other lender to bring the mortgage back into good standing.

Having sufficient equity (difference between market value and outstanding first mortgage) in your home is crucial if you are considering a second mortgage. It can be quite difficult to secure a second mortgage through a financial institution because they reserve second mortgages for individuals who have good credit and income to support the loan. The reality is that most borrowers require second mortgages to consolidate consumer debt or alleviate financial stress. For these individuals private mortgage lenders are the primary source of funds.

Looking for a second mortgage? We can help. Call Arnold Molder 416.461.0204 to speak directly with a second mortgage lender.

An old man and a young boy were traveling through a village with their donkey. The boy rode on the donkey and the old man walked. As they went along they passed some people who remarked it was a shame that the old man was walking and the boy was riding.

The man and boy thought maybe the critics were right, so they changed positions.

Later, they passed some people that remarked, “What a shame, he makes that little boy walk.” They then decided they both would walk.

Soon they passed some more people who thought they were silly to walk when they had a decent donkey to ride. So, they both rode the donkey.

Now they passed some people that shamed them by saying, “How awful to put such a load on a poor donkey.”

The boy and the old man said they were probably right, so they decided to carry the donkey. As they crossed the bridge, they lost their grip on the animal and he fell into the river and drowned.

With a tear in his eye, watching his donkey being carried away by the current, the old man turned to the boy and said “Young boy, fools are the ones that listen to the world!”

While you might think that this story is about my father (the old man) and I, it’s not! In the story everyone had an opinion about how the donkey should be used, likewise, everyone has an opinion about mortgage financing and how best to go about it. Think of the conversation at the water cooler or the next neighborhood barbecue.

Over the years I have observed that most people think of mortgage financing as being very static. in reality, mortgage financing should be viewed as dynamic and fluid. The advice and guidance being offered should be the result of understanding current economic conditions, market timing and most importantly, personal circumstances.

For guidance about your mortgage give us a call. Christopher & Arnold Molder 416.461.0204ext2

This generation of first time borrowers are spoiled rotten. Imagine their shock 5 years from now when their ultra low 3.59% fixed rate mortgage is renewed into a more realistic 6% mortgage? When I speak to older borrowers who have been around the block a few times I am constantly reminded by them of the 80s when mortgage interest rates where in the double digits and 24% wasn’t unheard of.

At that time my father was already a mortgage broker and told me that the majority of his business was arranging VTBs or vendor take back mortgages. Obviously with bank rates at 24%, the costs of owning a home were prohibitive and it was difficult to sell houses. Motivated sellers could make their home more attractive to purchasers by offering to lend money to the purchaser through a vendor take back mortgage at a much more competitive rate. The advantage is twofold:

1- The purchaser gets a great rate and by passes the stingy qualification of the bank.

2- For the vendor they are earning interest on the money that they have lent through a secure mortgage. The draw back for the vendor of course is that they loose liquidity from the sale of their home to spend elsewhere. Especially problematic if they are buying elsewhere.

A vendor take back mortgage is only possible provided that the vendor has sufficient equity in their own home. (i.e. if they are financed 100% they can’t offer a VTB because there is no equity)

Today VTBs are quite rare for residential purchases but an interesting article published by the Financial Post this week ‘Mortgages: You Can Take Them Or Leave Them’ suggests that in the future, the environment might dictate a return of the VTB.

If you are looking to arrange a VTB mortgage or need some guidance in offering one through a commercial sale or residential sale don’t hesitate to give Arnold or I a call. We love working on private mortgages and complex financing situations. 416.461.0204

This week I read an article in The Financial Post stating that 60% of mortgages in Canada are held by chartered banks. My father often talks to me about the ‘good ol’days’ when chartered banks weren’t in the residential mortgage business period. He often reflects back on the time when the majority of residential mortgages were provided by small specialized Trust & Insurance companies and private lenders. It was a very different world back then and it was only in the last 20 years that chartered backs have really started to dominate the Canadian residential mortgage market. This latest article from the Financial Post highlights this shift and why today the banks hold most of the cards in the mortgage game.

For many borrowers a mortgage seems like a pretty straight forward business. “The bank approves me for a loan, I go to my lawyer’s office to sign for the mortgage and then I pay the bank my regular principal and interest payments.” This is only the surface and really the side show of the facsinating business that are mortgages in Canada.