Beware of major losses in syndicated mortgages - real estate lawyer

by Ephraim Vecina01 May 2017
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.

COMMENTS

  • by george 5/1/2017 11:39:19 AM

    ...it's the old proverb...if it's too good to be true ...it probably is...These high return mortgages....ask yourself...why would they themselves not go to the bank and pay normal fees...because they are high risk and the bank will not touch them. On the other hand banks scrutinize till the cows come home (another old proverb)..where as the average investor, does not even come close. P.S come to London Ont. where you can STILL pay off your mortgage.

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