CMP 16.03 Private Lending Guide 2021

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PRIVATE LENDING GUIDE 2021 MORTGAGEBROKERNEWS.CA

PRIVATE

LENDING Learn more about the lenders that can deliver in a difficult environment

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Private lending’s post-pandemic future CMP checked in with two industry executives to find out whether the private lending sector can continue to ride the wave of 2020 – and what brokers should be aware of in the future TO SAY 2020 was a roller-coaster year for private lending might be putting it too mildly. When the pandemic struck, many brokers braced themselves for a market meltdown and economic collapse. Instead, the opposite transpired: Home sales – and prices – began an extraordinary climb as the mortgage market took off, shattering existing records amid a boom that showed no sign of stopping. Private lending saw some of the most dramatic changes. The initial reduction in demand and liquidity at the beginning of the pandemic caused many traditional lenders to change their lending requirements, leading scores of borrowers to turn to private lenders and mortgage investment corporations (MICs) for the first time. Now, as attention turns to Canada’s postpandemic recovery, there’s also a strong focus on whether 2021 will see the same stunning success for private lenders that the previous year brought, or if it will feature an inevitable cooling off in the market. For Bryan Jaskolka, chief operating officer at CMI Financial Group, the outlook appears positive for the foreseeable future. “The private market today is more robust than the pre-COVID market, and that’s saying a lot, given that the pre-COVID market was already incredibly strong,” he says. “We’ve seen a surge in demand.” Jaskolka notes that the numbers of Canadians who turned to private lending over the past year bodes well for the sector. “There are a lot of high-quality borrowers who have equity and have down payments but are just shut out of that traditional

“With a lot of new entrants and a real institutionalization of the alternative space, it’s definitely worth shopping around and seeing what else is out there” Taylor Little, Neighbourhood Holdings banking system,” he says. Still, Taylor Little, CEO of Vancouverbased alternative lender Neighbourhood Holdings, says brokers should be wary of some possible hurdles in the private and alternative space in the year ahead. One of

the most significant, he says, is that not all lenders will have access to equal amounts of cash – a potential headache for brokers and borrowers if their lending partners can’t raise enough capital. “One thing you always need to look out

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for as a mortgage broker in working with alternative lenders is: Do they have funds?” he says, adding that Neighbourhood has secured a hefty backlog of commitments from investors that will allow it to facilitate whatever new business comes its way. That problem could be amplified if private and alternative lenders’ profit margins remain thin due to low interest rates, Little adds. “Things are getting very tight, for sure,” he says. “We’re seeing rates fall below 6% in some cases, which is, for non-bank lenders, pretty low.” With the prospect of increased competition in the alternative and private lending space, Little encourages brokers to dig a little deeper to find the best possible deal. “With a lot of new entrants and a real institutionalization of the alternative space, it’s definitely worth shopping around and

seeing what else is out there,” he says, “because lots of lenders are bidding on lots of business. Trying to capture some of that for your client at an attractive rate might involve a bit more detective work to figure out who’s offering what, and when.” Little also highlights the fact that the exodus of Canadians from larger cities, which led to a boon for secondary and tertiary real estate markets, might end as the pandemic abates – and the consequences for private lenders could be significant. “If we find, two years from now, that a lot of people regret moving away from the city and are looking to sell their homes in smaller centres, that’ll be hard for lenders,” he says. However, given its strong performance last year, Jaskolka believes brokers who don’t take the time to familiarize themselves with the private lending space are missing out. “If they’re not dealing with a lender who

NOW YOU’RE IN THE DRIVER’S SEAT.

has a digital platform, they’re wasting their time,” he says. “Same goes if they’re using a lender that doesn’t provide a multitude of products, offer various price points or serve all of the country’s biggest housing markets. The less a single lender does, the more separate relationships a broker will need to maintain. That’s unnecessary – it just makes more work for the broker.” For brokers unfamiliar with the private lending space, Jaskolka warns against bearing some common misconceptions. “It still sort of shocks me how many mortgage agents automatically assume a private mortgage is for someone who has bad credit,” he says. “We lend to many borrowers who have 600, 700, 800 Beacon scores. A lot of ‘A’ borrowers benefit from alternative financing from time to time. Just knowing that will help brokers strengthen the options they can provide their customers.”

With uDrive, you’re in control. As an alternative MIC mortgage lender, we focus on being a good business partner to our broker community. We work diligently to find creative solutions for your clients who don’t qualify for traditional financing. • uDrive: No Fee or Lower Rate • Residential 1st and 2nd mortgages • Fully open options available • Lending in BC, AB, MB and ON • One or two year terms available • Maximum LTV of 75% • Submissions can be made via Expert, Finmo or Velocity

INVEST. LEND. GROW. threepointcapital.ca uDrive@threepointcapital.ca | 1.800.979.2911

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PRIVATE LENDING GUIDE

Paving the way Transforming from a family-owned brokerage to Canada’s premier private lender, CMI is aiming to set the standard for the broker-lender relationship

FUELLED BY innovation and a reputation for transparent, ethical lending, CMI Financial Group has experienced explosive growth in the 15 years since its founding. Evolving over time to anticipate the changing needs of the marketplace, the firm has cemented its leadership status in the alternative lending and investment space. It was a steady but long rise to the top, according to CMI COO Bryan Jaskolka. “We’re exceptionally proud of the leadership position we’ve carved out, but we actually have very humble roots,” he says. Humble and dramatic, as it turns out. Were it not for an accident that nearly ended his life, Jaskolka might never have conceived the idea for the company that would eventually become a national leader. “I was three years into university, and I suddenly found myself confined to a bed, recovering from life-threatening injuries,” he says. Unable to attend classes, Jaskolka shifted gears from education to innovation, something he was no stranger to. A self-described serial entrepreneur, he had started his first business, a web design and development company, at age 16. Once the websites were built, his customers needed somewhere to host them. With time to revisit this need during his recovery, Jaskolka developed and launched Nevidia, a website hosting company. He later sold it to a major American company, which freed up his time to pursue new opportunities. As the son of a real estate veteran, Jaskolka was no stranger to the mort-

gage industry, which, at that time, was predominantly operating under a bricksand-mortar model. Given his tech background, Jaskolka identified an opportunity to build a predominantly online mortgage brokerage, which he believed would make the industry more sustainable and environmentally friendly. “I had this vision of providing financial solutions to disadvantaged consumers from the comfort of their own home – and without chopping down a forest to do it,” he says. And so the seeds of CMI were sown, taking root as a small, family-run mortgage brokerage in the basement of Jaskolka’s childhood home.

The brokerage quickly grew, but the 2009 financial crisis took a toll on the mortgage industry, and CMI was not immune to its impact. As the company shrank and lost most of its original staff, Jaskolka realized it had to evolve or face extinction. With many lenders exiting the subprime market, the need for highquality private mortgage products became apparent, and Jaskolka saw the opportunity to reinvent CMI as a lender. “I didn’t want to simply reinvent the business; I wanted to reimagine the entire industry business model,” he says. Jaskolka worked tirelessly to design custom software that would make the

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lending process simple and green, and his efforts gave rise to CMI Mortgage Investments (originally Canadian Lending Inc.), a fintech-oriented private lender backed by game-changing proprietary technology that enables a fast, seamless lending process for investors, brokers and borrowers alike. “The lessons of 2009 were not easy ones,” Jaskolka says. “They brought me back to the vision that sparked the origin of CMI – to allow disadvantaged homeowners access to liberalized lending in a professional, courteous, fair and ethical manner. There was a big gap in the market, and CMI stepped in to fill it.” From there, it was a domino effect. CMI Mortgage Investments grew so quickly it required its own mortgage administra-

write, service and fund mortgages, ensuring a seamless mortgage lending and investment experience. But you won’t find its logo at the top of an office tower. Staff operate almost completely virtually through formalized telecommuting arrangements. This flexible virtual work environment has been another key contributor to the company’s rapid growth and expansion. CMI’s trajectory appears to be headed only upwards. According to recent data from Statistics Canada, the value of all non-bank mortgage loans grew by an astonishing 924% between 2007 and 2018 – and that was before COVID-19. Like fuel on a fire, the global health pandemic has significantly accelerated the need for high-quality private lending solutions.

“Our genesis as a brokerage has been pivotal to our growth. It’s a key reason we’ve become a preferred partner within the broker community” Bryan Jaskolka, CMI tion service, giving rise to CMI Mortgage Services (originally Canadian Servicing Inc.) and allowing the lender to offer a fullcycle private mortgage experience, from origination to discharge. Looking back on the past 15 years, Jaskolka credits the firm’s brokerage roots as one of the keys to its success. “Our genesis as a brokerage has been pivotal to our growth,” he says. “We understand the business firsthand, and that has informed everything from our product offerings and technology platforms to our submission and underwriting processes. It’s a key reason we’ve become a preferred partner within the broker community. We understand how to relate to brokers because we used to be one.” Today, CMI includes four sister brands that work collectively to originate, under-

With a large proportion of the Canadian workforce displaced, many people have turned to the gig economy for income. These have become practical, necessary and lucrative employment opportunities, but they’re still considered non-traditional income sources by banks and fall outside of B-20 regulations. This creates a new challenge for homeowners and buyers looking to qualify for mortgage financing, resulting in greater numbers of Canadians looking to brokers for guidance. “Mortgage brokers need to be ready to serve this growing yet underserved segment of borrowers,” Jaskolka says. “It’s never been more important for them to have a solid understanding of private lending fundamentals.” And while the private lending space has evolved over the years from a largely

ABOUT BRYAN JASKOLKA Bryan Jaskolka has been the managing executive and visionary behind CMI Financial Group since its inception in 2005. Under his leadership, CMI has grown from a family-owned brokerage to Canada’s premier private mortgage lender and one of the fastest-growing companies in Canada, ranking on the Canadian Business Growth List for several years and on The Globe and Mail’s Top Growing Companies list in 2020. CMI was also in the top two for Small Business of the Year at the Canadian SME National Business Awards in 2019. Through its flagship Canadian Mortgages Inc. brand, the lender provides its mortgage broker partners with access to creative financing solutions and more than $1 billion in non-bank private mortgage funds. Jaskolka has been recognized as a key contributor and driving force within the Canadian private lending and mortgage financing industries. He was named a Top Executive in Lending in 2019 by the Canadian Lenders Association, and he is also a CMBA committee member. Having never received a university degree, Jaskolka joins a long list of successful entrepreneurs who prove that there are many roads to success. His unorthodox thinking, natural business savvy and willingness to take calculated risks have made CMI a success. unregulated marketplace into a highly professional domain, Jaskolka cautions that not all private lenders are created equal. “Brokers need to understand how to best help their clients and how to avoid predatory lenders trying to take advantage of this situation,” he says. “The more they understand, the better they will be able to help serve and protect their clients.” Taking a closer look at CMI might be a good place to start.

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ALTA WEST CAPITAL awcapital.ca 888-554-9075 Lending markets: Urban/suburban centres in Ontario, Alberta and BC Niche/focus: Providing alternative capital funding using an equity-based lending approach on all refinances/ purchases of residential properties, multi-residential properties and commercial properties Products: Up to 85% LTV first, second and third mortgages

Customer type: Business for self, new to Canada, bruised or damaged credit, etc.

Terms: Six-month, one- or twoyear terms Rate: As low as 4.89%

Property type: All residential homes, multi-residential up to 15 units and commercial properties

Maximum amortization: Interest only or up to 35 years

Purpose: Purchase, refinance, bridge

Fees: As low as 1.25%

financing Maximum LTV: Up to 85%

Preferred loan amount: $30,000 to $3 million

Minimum Beacon: None

Residential First and Second Mortgages Land Construction Commercial Investment Apartment Buildings Office and Medical Buildings Special Purpose Properties - Gas Stations, Hotels, Churches, Mosques, Retirement and Nursing Homes, Self-Storage, Student Residences and more Call or send a package for a quote: CYR Funding Inc. #11681 Attention: Renal Malkah 905-731-1111 Ex 229 (b) 647-838-5061 (c) rena@cyrfunding.com

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BLUESHORE PACIFICA ALTERNATIVE MORTGAGE CENTRE blueshorepacifica.com 604-365-4244

Purpose: Purchase, refinance, equity take-out, bridge and inter alia Maximum LTV: 75%

Rate type: Fixed or floating Maximum amortization: Interest only or 30-year maximum Fees: 2%, typically split with the broker

Lending markets: BC – Greater Vancouver, Squamish, Whistler, Victoria

Minimum Beacon: None; credit to be reviewed on a case-by-case basis

Niche/focus: Common-sense lending for borrowers with realistic repayment plans

Terms: Pacifica One-year open term

Products: First and second mortgages

BlueShore NT One- to five-year closed terms One-year open term

Blueshore NT $100,000 to $4 million

Property types: All one- to four-unit owner-occupied, rental and mixed-use residential properties, including condos and cottages. No restrictions on location. Remote and rural properties considered on a case-by-case basis

Maximum amortization: Up to 40 years or interest only

Property type: Residential properties, commercial properties and land

Preferred loan amount: Pacifica $100,000 minimum No maximum

CANADIAN MORTGAGES INC. thecmigroup.ca 888-465-8584 Lending markets: Ontario, British Columbia, Alberta and Manitoba Niche/focus: Customized private mortgage financing delivered exclusively through the mortgage broker channel. Offering flexible, innovative solutions tailored to your clients’ needs. Higher LTVs available through first and second mortgage bundles. Known for ethical lending practices and exceptional fast service Products: First, second and third mortgages; bundle mortgages; short-term and bridge loans; equity mortgages and renovation financing Customer type: A-, B- and C-level credit; no minimum Beacon score Income sources: All income types are considered: salary, commission, business for self, freelance, retired and Canada Response Benefit (CRB)

Purpose: Financing available for purchases, business working capital, debt consolidation, bridge loans, investment purposes, tax or mortgage arrears, pandemic relief, home renovations and much more Maximum LTV: 75% on first mortgages, 85% on stand-alone second mortgages and up to 85% on mortgage bundles in urban markets. Higher LTVs considered on a case-by-case basis Minimum Beacon: None

Fees: 1% to 3% on first mortgages, 2% to 6% on second mortgages. All fees are dependent on location, income, credit and security Minimum loan amount: $50,000 on first mortgages, $25,000 on second mortgages; smaller loans available on a case-by-case basis for low LTVs Maximum loan amount: Determined on a case-by-case basis Special features: Prepaid mortgages, mortgage bundles, high-ratio bundles, custom term lengths and lending behind collateral-charge mortgages, as well as CHIP reverse mortgages

Terms: Three, six, nine, 12 and 18 months; up to 24 months available on a case-by-case basis Rate type: Fixed

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CAN TERRA FINANCIAL Customer type: Individuals with flawed credit, business for self, non-bankqualified and non-residents

Terms: One to two years

Property type: Residential properties in both urban and rural locations, acreages/ land, and small commercial

Maximum amortization: Interest only or up to 35 years (prepaid payment option available)

Niche/focus: We offer equity-based financing solutions and flexible terms to cater to clients who don’t qualify with bank lenders. We lend on all types of residential properties in urban and rural locations, as well as acreages/land and small commercial.

Purpose: Purchase, refinance, debt consolidation, short-term financing, cash flow issues and renovations

Fees: Options for clients who are rateor fee-sensitive. No lender fee options available. Broker fees will apply.

Maximum LTV: 75%; lower LTV ratios will apply to rural properties, acreages/ land and small commercial

Preferred loan amount: Up to $500,000; larger mortgages considered on an individual basis

Products: First and second mortgages

Minimum Beacon: None

canterra.net 888-869-4912 Lending markets: British Columbia and Alberta

Rate type: Fixed

CYR FUNDING cyrfunding.com 905-731-1111 Lending markets: Ontario Niche/focus: We finance all types of properties: residential, commercial, land, construction, special-purpose properties, industrial, etc. Products: LTV ratio up to 90%, depending on qualifications

Customer type: Business for self, new to Canada, developers, builders, homeowners, real estate investors, etc. Property type: Residential, commercial, land, special-purpose properties, industrial, etc. Purpose: Purchase, refinance, construction, development, etc. Maximum LTV: Up to 90% Terms: Six months to 10 years, depending on the deal

Rate: As low as 1.55% Maximum amortization: Interest only or up to 35 years Fees: Quoted on each individual deal Preferred Loan Amount: $50,000 to $100 million+ Special features: We work with institutions and private funds – maybe we can beat your usual sources. No-cost, no-obligation quote

FIRST SOURCE MORTGAGE CORPORATION firstsourcemortgage.ca 416-221-2238 Lending markets: Southern Ontario Niche/focus: Commercial bridge lending, industrial, land, incomeproducing, etc.

Property type: Commercial and residential first mortgages

Minimum Beacon: None Terms: One to two years

Purpose: First Source is a boutique private commercial bridge lender, offering flexible lending options with a committed, hands-on approach. We are an asset-based lender that evaluates the strength of a loan based on the value of the real estate.

Rate type: Interest only Maximum amortization: N/A Fees: 2%

Products: First mortgages – bridge loans Maximum LTV: 80% Customer type: Builders and developers, private investors, etc.

Preferred loan amount: $3 million to $9 million

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HOSPER MORTGAGE hospermortgage.com 844-674-0329 Lending markets: Ontario Niche/focus: Private lender Products: • First mortgage refinances to 75% LTV (80% on a case-by-case basis) • First mortgage purchases to 80% LTV (major urban centres)

• Second mortgages to 85% LTV (major urban centres)

Minimum Beacon: None

• Second mortgages to 80% LTV

Terms: Three months, six months or one year

All products are Ontario-wide and will be reviewed on a case-by-case basis.

Rate type: Starting from 6.99%

Customer type: Clients having difficulty verifying income to bank, bruised credit, home flippers, banks pulling out at the last minute or bridge mortgages Property type: Residential and agricultural/rural assessed on a case-by-case basis

Maximum amortization: 40 years Fees: Starting at 1.5% Preferred loan amount: $350,000 for first mortgages, $80,000 for second mortgages

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Property type: Single-family detached, duplexes, townhouses, land, condos, construction, bridge financing Purpose: Equity lending

Maximum amortization: 25 years or interest only

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Fees: Starting at 1.49% Preferred loan amount: Under $2 million

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RIVERROCK MORTGAGE INVESTMENT CORPORATION riverrockmic.com

Customer type: BFS, new to Canada, bruised and damaged credit

416-504-1886 Lending markets: Ontario Niche/focus: Asset-based lending; flexible on proof of income, credit and servicing ratios Products: First and second mortgages

Rate type: First mortgages starting at 6.99%, second mortgages starting at 8.99%

Property type: Residential urban and suburban properties

Maximum amortization: Interest only

Purpose: Purchase and refinance

Fees: 1% to 3%

Maximum LTV: 80%

Preferred loan amount: $50,000 to $2.5 million for first mortgages, $25,000 to $750,000 for second mortgages, exceptions made on a case-by-case basis

Minimum Beacon: None Terms: Six months or one year

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PRIVATE LENDING GUIDE

ROMSPEN INVESTMENT CORPORATION romspen.com

mixed use, hotels, development projects and construction facilities

800-494-0389 Lending markets: Canada and the US

Purpose: Purchase, refinance, development, construction

Fees: From 2% of loan amount, plus lender’s legal fees, disbursements and applicable taxes

Preferred loan amount: $5 million to $150 million

Maximum LTV: 75% Niche/focus: Urban centres (non-urban centres on a case-by-case basis)

Minimum Beacon: None

Products: Term, bridge, construction and revolving credit facilities

Terms: One to three years

Customer type: Commercial borrowers

Rate: 7.75% and up

Property type: Industrial, commercial, multi-family, entitled land, retirement,

Maximum amortization: Interest only and flexible amortization

THREEPOINT CAPITAL threepointcapital.ca 800-979-2911 Lending markets: British Columbia, Alberta, Manitoba and Ontario

Niche/focus: Creative, solutions-based, flexible lending on marketable residential properties in urban locations for those who do not qualify for traditional lending. Tell us your client’s story, and we’ll do our best to help.

Products: First and second mortgages

Customer type: Individuals (including self-employed, stated income, non-residents and new to Canada), as well as holding and operating companies

Property type: Residential owneroccupied or rentals (single-family detached, townhouses, duplexes, fourplexes and condominiums)

Purpose: Purchases, refinances, equity take-out, debt consolidations and renovations

Maximum LTV: Up to 75%

mortgages; interest only considered on first mortgages under 65% LTV Fees: Our uDrive lending program allows you and your client to choose between no lender fee and a higher rate or a lower rate and a 1% or 2% fee, depending on what best suits their individual needs.

Preferred loan amount: Maximum of $1.25 million on a single property and $1.75 million inter alia

Minimum Beacon: None

Terms: One- and two-year terms available Rate type: Fixed rate with options for an open term

Maximum amortization: 30 years on first mortgages and 25 years on second

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VWR CAPITAL CORP. vwrcapital.com 866-907-5407 Lending markets: BC, Alberta, Saskatchewan, Manitoba and Ontario Niche/focus: Residential Products: First, second and third mortgages Customer type: Individuals, holding companies, operating companies, non-residents and more

Property type: Single-family, townhouses, condos, row homes, serviced land, raw land, multi-family

Rate type: Fixed Maximum amortization: Up to 35 years; interest-only mortgages available

Purpose: Purchase or refinance, equity take-out, debt consolidation, CRA arrears, foreclosure rescue, etc. Maximum LTV: 75%

Fees: Starting at $750 for first mortgages; $500 for second and third mortgages Preferred loan amount: $25,000 to $2.5 million

Minimum Beacon: None Terms: One year – open mortgages available

www.hospermortgage.com 1st, 2nd, and 3rd mortgages No income documents required No credit qualification required Quick closings Flexible solutions for each deal 3 month or 6 month terms available, fully open Will lend behind private lenders* *Subject to underwriting Hosper Mortgage provides fast approvals and quick closings in the alternative lending space. We lend on residential 1st, 2nd, and 3rd mortgages all across Ontario. We’re an equity based lender, with no income or credit qualifications & no hidden fees.

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First Mortgages

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Rates starting at 6.99%

Rates starting at 8.99%

Lender fee starting at 2%

Lender fee starting at 2%

First Mortgages

Second Mortgages

GTA East

GTA North West

Rates starting at 6.99%

Alissa Kuksis Lender fee starting at 2%

GTA South West

Rates starting at 8.99%

James Brinias

Joseph Pesce

Lender fee starting at 2%

647-660-8317

647-660-8240

647-670-0864

GTA East alissa@riverrockmic.com

GTA North West james@riverrockmic.com

GTA South West joseph@riverrockmic.com

For Brokers Between 427 and Ottawa and North to Barrie.

For Brokers in Brampton / Mississauaga

For Brokers in Southwest Ontario and around to Niagara

alissa@riverrockmic.com

james@riverrockmic.com

joseph@riverrockmic.com

For Brokers Between 427 and Ottawa and North to Barrie.

For Brokers in Brampton / Mississauaga

For Brokers in Southwest Ontario and around to Niagara

Alissa Kuksis 647-660-8317

James Brinias 647-660-8240

Joseph Pesce 647-670-0864

The Manager, RiverRock Management Inc., is licensed as a Mortgage Administrator through FSRA (Financial Services Regulatory Authority of Ontario). Mortgage Administrator Lisence 12514

The Manager, RiverRock Management Inc., is licensed as a Mortgage Administrator through FSRA (Financial Services Regulatory Authority of Ontario). Mortgage Administrator Lisence 12514

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We have something other lenders often don’t. Money. With over $3 billion under administration, Romspen is a boutique non-bank mortgage lender specializing in commercial real estate in Canada and the US. For your financing of $10 million to $150 million we bring speed, agility, and a commitment to complex execution you will not find in larger institutions. Blake Cassidy or Pierre Leonard | 800 494 0389 | www.romspen.com

License # 10172

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DATE:

MARCH 17, 2021 - 2:05PM

LIVE: NA

23/03/2021 4:28:02 am TRIM: 8.375” x 10.875” BLEED: 8.375” x 11.375”


PARTNER WITH CANADA’S PREMIER PRIVATE MORTGAGE LENDER We are proud to serve our mortgage broker partners with the industry’s most innovative and extensive private mortgage financing solutions. We lend across Canada on all types of owner occupied, rental and mixed-use residential properties.

Private Alternatives Have Never Been More Important. We are a make-sense lender. Partner with us to access creative and competitive options — with no minimum beacon score.

Offering custom solutions tailored to your clients’ needs: 9 9 9 9 9 9

1st Mortgages 2nd & 3rd Mortgages Bundle Mortgages Bridge Financing Equity Mortgages Home Renovation Mortgages

One of Canada’s fastest growing companies

We can help with rush purchases, debt consolidation, working capital, arrears and more.

Access to $1 billion in capital

CALL US TOLL FREE

1-888-465-8584 canadianlending.ca/brokers | deals@cmi-loans.ca

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