The Situation
The client owned a two-bedroom rental condo worth about $660,000 with an alternative lender's mortgage of roughly $512,000. In the summer of 2023 the tenant left and the unit stayed empty until October; at the same time the sub-tenant in the client's own rented home moved out. For three months the client was carrying personal rent, the empty basement's share and the condo's mortgage, about $7,750 a month in all, on one income.
The Challenge
The lender granted a one-month payment deferral, then declined to extend it and referred the file to its legal department. A certificate of pending litigation went on title, and the lender stopped accepting payments. By then the condo was tenanted again at $2,750 a month and the client's masonry business had signed contracts worth more than $12,000 a month, but a lender in foreclosure mode does not reopen the file, and a bank will not touch a mortgage with a CPL on it. The clock was running.
The Solution
We placed the file with a mortgage investment corporation on a one-year closed term, interest-only, at 80% loan-to-value: about $528,000, enough to pay out the existing lender in full, including the arrears and legal costs, and clear the CPL. The MIC underwrote the property, the rent and the new contracts rather than the credit history of the past year. The exit was set before closing: list the unit for sale during the term, with a refinance to an alternative lender as the second route.
The Outcome
The payout closed and the foreclosure ended. The client kept the condo, the tenant and the equity, roughly $130,000 that a court sale would have consumed in costs and a forced price, and bought a year to sell on their own terms. A MIC at a higher rate for twelve months cost far less than losing the property.