Mortgage Insurance - life claim stories or real situations

Click here to read these compelling real life cases.

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Investment in Foreclosures - myth or reality for the average person?

Foreclosure investment: an elusive myth or apparent reality?

It is raining foreclosures. Canada is experiencing significant increases in foreclosure. Many

seasoned investors are spending much time and resources to identify “distressed” (read:

foreclosed) properties, in an effort to acquire them at significantly below market value. Upon

acquisition, the investor can improve the property and sell at a higher price or simply keep it as a

rental property. This article will briefly introduce you to the idea of foreclosure, why investor’s

like to find them and an example of how buying a foreclosure works.

What is a foreclosure?

Many have heard the term foreclosure in their life, but few understand what it means. Practically

speaking, foreclosure is the legal process of transferring property ownership from the borrower

to the lender.

Why is a property foreclosed upon?

Normally, foreclosure is caused due to non payment of a mortgage. This can happen for a

number of reasons including, loss of job, divorce, disability or other even death.

Other reasons causing foreclosure is one that is more common in today’s climate: lenders failing

to renew mortgages. Yes, it is true. For years may have treated a mortgage renewal as a simple

signature on a renewal notice sent to you in the mail. In the last 12 months however, some

lenders are no longer renewing mortgages either because the lender is out of business or because

they no longer offer the mortgage product, such as revenue property mortgage.

As the borrower, you may have made all your payments on time, however upon renewal date,

the lender has the right not to renew, despite your good payment history. If you cannot find a

replacement lender within a reasonable amount of time, (sometimes up to 90 days) the existing

lender will initiate foreclosure.

Why do savvy investors seek foreclosures?

Experienced investors seek foreclosures because they know that the court system uses a

valuation system to value properties that are in foreclosure at a far lower amount than market

value. The value they use is called forced sale, cash value. The general idea of forced sale, cash

value is to determine what a person would pay for the property, if it were to be purchased using

all cash, not bank financing. Like in many things in life, a buyer usually gets a good deal if they

pay for something with all cash, instead of credit. You may normally experience this type of

pricing in garage sales, flea markets or shopping bazaars. Hard to believe, but this same concept

applies in the foreclosure system.

During the foreclosure process, the courts order an appraisal on the subject property in order to

determine both the market value and forced sale, cash value. In general terms, if the borrower’s

mortgage is worth more than the forced sale, cash value then most likely the borrower will end

up losing the house to the lender. If the forced sale value is higher than the mortgage amount

owing, then the borrower will be given time to either refinance or sell the house, before the lender is given a chance to take it over.

The savvy investors seek those properties where the mortgage amount owing is far less than the

forced sale, cash value so they can negotiate a purchase from the current home owner at a value

is both low enough to generate a high margin and that will be enough to payout the lenders on

title.

Why do people who are in foreclosure sell their houses to investors at a value far less than what

the market will offer?

Many times homeowners who are in foreclosure simply do not want the stress. In other cases, it

may be cheaper to sell the house fast, rather than incur legal fees that can average over $12,000.00

just for the lender’s lawyers ---not including the borrower’s lawyers, court costs, court appointed

realtor costs, bank late interest, fees, other charges and arrears payments. If the foreclosure goes for a long time, over 6 months (or into the years - yes this can happen), total foreclosure costs can come to over $20,000.00, not including the loss in house value because of the stigma associated with foreclosure.

Example of a foreclosure purchase:

For example, let’s say a property has a market value of $425,000.00, based upon comparable

sales in a neighborhood. The property is in foreclosure, so the court appointed appraisal firm

determines a forced sale, cash value of $360,000.00. Additionally, let’s say the owner of the

property owes the lender a mortgage amount of $280,000.00. In this example, we have “market

equity” of $145,000.00 and “hard equity” of $80,000.00. Despite the equity in the property, the

homeowner may be happy just to have another person write them a check for $50,000.00 above

the amount owed to the lender and walk away from the headache.

Hard to believe but yes, this happens. Of course, the investor does not get the instant $95,000.00

equity for free, they must also have enough money or financial strength to either payout the

existing mortgages or bring the arrears payment up-to-date and convince the lender to let them

take over the payments.

Now the new owner can fix the house up, or better yet, if the house is already in great shape, just

clean it and list it for sale. If the investor is not interest in making a fast dollar, but would like

to make more profit, over the longer term, then they may simply keep it as a rental and sell it in

years to come.

Where to find foreclosures:

Mortgage brokers specializing in foreclosures

Other Investors

The court house

Realtors

MLS

Websites

Apply Now for your mortgage or contact MortgageQuote.ca for details at 1-866-948-7283.

Investing in Rental Properties

Rental Properties - what you should know before you invest

The key thing here is to speak to your accountant, lawyer and banker. After that, speak to your trusted mortgage professional. If you don't have one, find one (www.caamp.ca).

Then you will be able to make a decision on your own. The advise from bankers and mortgage professionals are typically free. The advice from lawyers and accountants should cost you no more than say 1 hour each of their time. This is not a hard business, but you must first invest in your knowledge before you start investing in real estate.

Trust us--we've been there and done that.

Apply Now for your mortgage or contact MortgageQuote.ca for details at 1-866-948-7283. 

Credit Scores/Inquiries - how they affect you

TransUnion and Equifax are the two credit reporting agencies. They are very important in your ability to borrow money.

So long as you pay your payments on time, for credit cards and loans, you are fine. If you do not pay on time, then your credit score will become comparatively low and your ability to borrow will be diminished.

Inquiries:

If you are a credit seeker, this is also bad. A credit seeker is a person who consistently applies for credit, repeatedly, in an effort to obtain cash. The way the credit bureau knows you are a credit seeker is if you have 3 or four inquiries in a short period of time. IE: Your record shows that you went to 8 stores over the course of 1 week to borrow money.

Don't worry about having 2 or 3 inquiries over the course of a week, since this is deemed "normal". However don't have 2 or 3 inquiries per week, each week. That is to say, it is normal to have, over the course of 12 months, 4 or 5 inquiries, ie: an inquiry or two every 3 or four months. After all, you have to live life and get electricity hook ups, buy new cell phones or purchase new cars or homes.

 It is not normal, however, to have 20 or 30 inquiries over 12 months. If you have multiple inquiries, you may be deemed a credit seeker and your credit score will go down.

Apply Now for your mortgage or contact MortgageQuote.ca for details on your credit score and you you may improve a low score, at 1-866-948-7283.

 

Appraisals are NOT Home Inspections - be careful

Appraisals are NOT Home Inspections - be careful

When you obtain financing for a property, if you are purchasing the property, the lender will want an appraisal to determine if the value is good enough to lend against. If the value is not good, then the bank may say NO or may lend less money than you are requesting, which means you must use your own cash towards purchasing the property.

The appraisal does not tell the bank that their is a leaky water pipe, or that their is mold in the basement, or a crack in the foundation or the shingles on the roof need repair. 

So, if you buy a house what are you to do? Well, you can hire a home inspection company. You will find them on the internet. Look for good feedback and hire that firm. The home inspection company will let you know what is materially wrong with the house so that you can either negotiate a lower price from the vendor or look for another house to buy. 

As with the appraisal cost, the cost of the home inspection is normally paid by you.

Contact MortgageQuote.ca 1-866-948-7283 for details. Or Apply Now for your mortgage.

Angels in the lending world: when the bankers no longer help

Angels in the lending world: when the bankers no longer help

Where do you turn to if a traditional mortgage lender such as bank, trust company or mortgage

investment company says “no” to your borrowing needs?

Try a private lender.

Private lending is truly one of the world’s oldest businesses. For as long as organized humans

have owned or possessed anything of value, they have either borrowed money or loaned money

against the item of value. Transactions in the ancient world were normally done by and between

individual persons and not companies.

In the past 100 years, the main source of money lending became banks, corporations and

sometimes governments. However the draw back of these types of lenders is that they have strict

rules when it applies to income, credit history or type of collateral.

With the advent of email and the internet, technology has made it possible for the reappearance

of “person to person” lending, which is an exciting time for people who find it difficult to qualify

within today’s corporate controlled lending environment.

Why is a private lender easier than a bank?

Private lenders are people too. They make their lending decisions on a combination of business

sense, common sense and instinct. They have hopes, dreams and emotions just as the

borrowers do. So long as your story makes sense and so long as you have something of value,

odds are is that you may be able to borrow money.

Who are Private Lenders?

Any one who has saved money and is willing to lend it out. They could be people you already

know such as a member of your family, or someone you know at work, or perhaps someone in

business or simply a stranger off the street.

Many private lenders are hardworking people themselves, who have struggled to save money

through business or work. Many are retired persons who have accumulated wealth over their

lifetime and now choose to help others. No matter who the private lender is or how they made

their money, these individuals have made a conscious decision to help others, through the

business of lending money.

What do Private lenders use as security?

Depending on the lender, any item of value. Normally it is real estate such as buildings and land

however some lenders have lent on precious objects (ie: gold, diamonds), art, automobiles, or if

you own a company, your can even pledge your accounts receivables.

What type of lending do Private Lenders do?

You can often borrower first mortgages, second mortgages, third mortgages or even short-term/

bridge loans.

What are the rates private lenders charge?

Private lenders can charge any rate they want, however the legal limit is 60%. Normally lenders

will range from as low as 8% to as much as 18% interest. On average, you can expect to pay

between 12% and 14%. Sometimes private lenders will charge fees. Private lender rates are not

as low as bank rates but in many cases, these rates are far less than credit cards and overdraft

rates, which can be as much as 24%. And they are far cheaper than pay day loan companies

who are known to charge beyond the legal limit of 60%, sometimes as much as 400%.

The key point to understand about private lenders is that they are a potential option, when you

don’t have one.

How do I find a Private Lender?

Ask your banker

Ask your lawyer

Ask your accountant

Ask your mortgage broker

Look up in the internet under keywords “private lending”

Borrower and Lender Beware.

Although this article talks about the good things when dealing with private lenders and private

borrowers, remember that whenever you are borrowing or lending money privately, you should

always have legal representation. There are plenty of examples of problems faced by both

borrowers and lenders. For example, a borrower signs up to a private loan that has very strict

repayment terms. Or, a lender loans money and never has it paid back.

If you are a borrower, make sure you use lawyer whom you trust, to represent you, no matter how

small the transaction. If the lender says “use our lawyer”, respectfully decline and find your own

lawyer. This is your safest way to go.

If you have extra money and are interested in becoming a lender, get professional help from

either a lawyer or mortgage broker who is well versed in private lending. Make sure you get

references from your mortgage broker before you deal with them.

There is more to this subject than what you see here, so if you are interested in either lending

or borrowing, do your research first. If you have questions regarding private lending from

either a borrowing or lending perspective, call MortgageQuote Today at 403-590-6610, or visit

www.privatelender.org, home of Canada’s Private Lending Network.

What type of lending do Private Lenders do?

You can often borrower first mortgages, second mortgages, third mortgages or even short-term/

bridge loans.

What are the rates private lenders charge?

Private lenders can charge any rate they want, however the legal limit is 60%. Normally lenders

will range from as low as 8% to as much as 18% interest. On average, you can expect to pay

between 12% and 14%. Sometimes private lenders will charge fees. Private lender rates are not

as low as bank rates but in many cases, these rates are far less than credit cards and overdraft

rates, which can be as much as 24%. And they are far cheaper than pay day loan companies

who are known to charge beyond the legal limit of 60%, sometimes as much as 400%.

The key point to understand about private lenders is that they are a potential option, when you

don’t have one.

How do I find a Private Lender?

Ask your banker

Ask your lawyer

Ask your accountant

Ask your mortgage broker

Look up in the internet under keywords “private lending”

Borrower and Lender Beware.

Although this article talks about the good things when dealing with private lenders and private

borrowers, remember that whenever you are borrowing or lending money privately, you should

always have legal representation. There are plenty of examples of problems faced by both

borrowers and lenders. For example, a borrower signs up to a private loan that has very strict

repayment terms. Or, a lender loans money and never has it paid back.

If you are a borrower, make sure you use lawyer whom you trust, to represent you, no matter how

small the transaction. If the lender says “use our lawyer”, respectfully decline and find your own

lawyer. This is your safest way to go.

If you have extra money and are interested in becoming a lender, get professional help from

either a lawyer or mortgage broker who is well versed in private lending. Make sure you get

references from your mortgage broker before you deal with them.

There is more to this subject than what you see here, so if you are interested in either lending

or borrowing, do your research first. If you have questions regarding private lending from

either a borrowing or lending perspective, Contact MortgageQuote.ca 1-866-948-7283 for details. Or Apply Now for your mortgage.

MQCC™ History

In 2006, the MQCC™ developed what is today, the world's first internationally recognized, energy-efficient, resource-efficient, quantum computing-ready, bespoke, unified, defense standard, military/law enforcement-grade, turn-key, plug 'n play (PnP), end-to-end (E2E), interoperable, "secure, risk-based meta-operating system".  A functional system built in accordance to the MQCC Artificial Algorithmic Intelligent (AAI™) brand of self-learning artificial intelligence (AI) systems-standards and pioneering MQCC "blockchain" principles,  designed to increase profits, increase cost savings and reduce expenditure through real-time assurance of statutory, regulatory and process conformity of both regulatory (regulator) and regulated (regulatee) organizations, within any industry sector.

Patent-pending and proprietary, continually improving, world-class MQCC systems and technology creates measurable levels of efficiency, quality, trust & confidence for the three critical risk management functions of a regulated and non-regulated financial sector company:  "Macro" functions: Business (Operations), Enterprise (Conformity) and Governance (Audit); and "Micro" functions: processes. All within a transparent, "blockchain" principles-based, proof-of-work" organization conformity meta-operating system consisting of integrated internal controls for risk management, governance, legal and operational processes.

In good company. The MQCC™ is the only organization in Canada's finance sector, whose risk based, unified Quality Management System technology is built on Standards that are both: recognized by 163 countries, including the Canadian Federal Government and all finance sector regulators; and registered thereto, by an Accredited Certification Body: "to safeguard consumers and users of [financial] products and services ..."

CLIENT: MortgageQuote Canada Corp. - E&O Liability Insurance - ISO 9001:2000 - Risk Reduction Proof: A message to a Canadian regulated insurance provider for peer-to-peer (p2p; Non-Bank, Non-Institutional, Non-Syndicated, Non-Regulated or Regulatory Exempt, Free Trading Finance; also known as Peer-to-Peer (P2P)/Private/Crypto/Secret/Shadow Finance) financial services:

 A message to a Canadian regulated insurance provider for peer-to-peer (p2p; Non-Bank, Non-Institutional, Non-Syndicated, Non-Regulated or Regulatory Exempt, Free Trading Finance; also known as Peer-to-Peer (P2P)/Private/Crypto/Secret/Shadow Finance) financial services:

Mar 31, 2010, 5:17 PM

[Redacted[, [Redacted],

 

You have sparked a keen interest here and I believe that this exercise will be worth going through.

 

The information contained here in is proprietary and confidential and governed by the client/agency privilege between our firm, your firm and the insurers. This information is provided on the strict undertaking that it will be used for the purpose of establishing a risk profile and pricing model for MortgageQuote Canada Corp.

 

Here is back ground proof. The attachment ending wtih V2 is the ISO 9001:2000 standard by which our management system is designed and operated. It will take you at least 3 hours to read it  :-)   The operations are audited to ensure we work in compliance to the standard.

 

Our risk auditors are [REDACTED]. Your senior actuaries/underwriters will know who they are.

Here is proof of our certfication - attachment called Certificate and was originally issued in May 2008.  We are in "greenfields" and believe that you will not ever have expected that a company as small as ours has such initiative. In a word, from a standards, quality and compliance point of view MortgageQuote Canada Corp. is "incomparable".  And don't take my word for it, both lenders/borrowers are happy -- see the attachments called: [REDACTED] - customer surveys.

 

I believe that we have earned the right to speak to your underwriters and/or risk managers to determine if a case can be made for our firm to customize the risk premium based upon concrete, third party evidence that we have a bone fide, active and operational risk managment system in place. We are an outlier in the normal curve and believe that an underwriter, somewhere in North America will underwrite our Errors and Ommissions policy in light of our dedication to operating a world class company.

 

The only reason I bring this up is because your comments re: that there the insurers really cannot tell which mortgage brokerages who undertake private lending have the propensity to create risk. Unlike our peers who have been practicing for either 2 years or 30 years, our firm has implemented a proven risk managment practice for the last 36 months which your underwriters can quantify. And because they can quantify our risk management approach, they can price our E and OE with appropriate risk reduction discounting.  

 

The concerned decision makers or their assigns are welcome to audit our operations if they choose. We can do a remote audit session via internet since we are internet based.

 

I am also happy to convene a teleconference with your insurer and the senior risk management personnel of [Auditor]; in case your insurer needs to audit the veracity of [Auditor] auditing capabilities -- which I expect should not be an issue. [Auditor] Audits airplane manufacturers and medical device companies, wherein a defect event for these companies may yield criminal charges.

 

Furthermore, it will be interesting to see where this leads us.

 

 

Rgds,

A. K. (Anoop) Bungay,  B. Comm., AMP
Broker

MortgageQuote Canada Corp.
Alberta * British Columbia

toll free ph: +1.866.948.RATE (7283)x121
toll free fx: +1.866.948.FAX1 (3291)

www.mortgagequote.ca

 

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An ISO 9001:2000 Registered Company.

 

PRIVILEGE AND CONFIDENTIALITY NOTICE
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