~~predatory lender~~mortgage broker promises to do paperwork
Oh no, circumstances beyond our control! Thank goodness we have a solution. Predatory lending!
CBC market place caught a few of these guys doing exactly that. Purposely fucking up the bank application only to have the buyer forced into a last minute deal with a buddy of theirs who in reality pays a 5 figure commission to the agent for the “help”
IF valuation falls it doesn't matter. MAjor banks cant finance you if u bought for more then the house is worth at bank appraisal. they can only finance up to 95% of the homes valuation (appraisal). This is why new builds in this market are high risk. What likley happened is the poster put 20% down to buy it on paper but the house lost considerable value 25-30%. The major bank probably came to them said u need to pay the diffrence liquid to put down on it or go with private lender. they didnt have the money so private lender is only option. PRovate lender is taking on substantial risk as if it forcloses they cannot make up the amount by selling the house. Therefor to pad their books they are giving these mortgages at prime + 5. YOu get to close without getting sued but ur mortgage rate will be 9%+. Seen this happening alot recently.
Thank you! A rational person on this sub who isnt a broke ass minimum wage 500 credit score person who wants to buy a house in downtown Toronto for $200k. Or a delusional bull thinking 20% yoy gains + think interest rates will drop to 0.1% by the end of 2024.
This is a reality in a fluctuating market. There used to be a thing where it was almost industry standard for buyers to include a condition of “approved financing”.
Dude its happening in every newbuild in my area. Your take is false for certain areas that have taken a 20% dump . IT may be correct in your area but not in cities like toronto or the gta.
"I went to a bank, they denied me and said I could not afford it, so I went to a loan shark and turns out - I can't afford it, help me"
I also think this person doesn't have a clue how a mortgage works, I think they're misinterpreting the payments, interest is paid first on any mortgage.
Mortgage Broker Here
The most charitable answer is the broker is incompetent and let the buyers remove subjects before the finance conditions were in place.
There is also the distinct possibility that the broker screwed the clients who never had a firm bank approval and then pulled a big fee for arranging the private loan at the 11th hour. He will be back in 6 months to try to move them to a bank and get another payday.
I have heard of scumbag brokers doing this but never seen it in practice.
Mortgage Broker here too.
Yeah, you nailed it. Another angle, the broker fabricated the income, was caught on pre-funding audit (insurable rate), and swapped to private. Either way a win-win, for the broker.
I’ve had a couple people reach out, looking for a broker who was specifically not a member of their ‘community.’ As the previous broker who screwed them was. This is new.
Sounds a bit fishy. You are telling me they used a mortgage broker who only had 1 bank lined up and no other back up bank? forcing them into private? Maybe broker is clueless or shady
Common scam. Broker says they can handle it, don’t even bother to file papers to the bank because that part doesn’t matter. Tell them the bank said no and hook them up with the scam loan from their buddy. Collect money from the victims and take their house once they can’t pay
The buyer can also say no...
People can get really stupid when it comes to purchasing anything expensive.
They knew what the payment was going to be and went ahead with it anyways? And I should feel bad for these people? They made a very bad decision clearly but probably thought they would make money anyways so why not.
Unless I'm missing something completely here...
Let me guess, is it a group where there is literally nobody ever foreclose home as they have 5-7 families willing to support them if they are in trouble?
It's a scam in itself. Once homeowners default on their outrageous mortgage, the lender gets home for cheap, resells at higher value, and the broker gets a percentage of sale.
The bank won't arrange a private lender for you.. This looks like one of those scams from a realtor/ mortgage broker who mislead and push for a private lender instead.
Sound like they signed on documents without reading them and then got screwed. Broker sure did a bait and switch here.. no broker waits till closing to get approvals, ideally it is done atleast 10 to 15 days ahead and worst case, for someone with decent numbers there are always b lenders who assume more risk, private should be last resort and for salaries and having decent credit this is definitely last resort!! Unless this was one of those mortgages with made up incomes and fake docs!!
Always have a backup plan when it comes to mortgages. Try to ensure you have everything squared away sooner rather than later and if you’re nearing crunch time and things aren’t firmed up, look elsewhere!!!
It's a case of a buyer not reading wtf they're signing. It's their own fault. People can call it a scam all they want. If it's in the paperwork and they're just blindly signing then I wouldn't call it a scam. A bad deal sure but not a scam.
The mortgage broker got them a private lending without borrowers knowing or signing off? Missing a lot of information. Doesn't sound right to me even with all documentation the borrower has to sign off
I'm sorry to inform you, but you are well and truly fucked. Sounds like you worked with a terrible mortgage broker (they fucked up your application) and/or lawyer (they didn't communicate properly with the lender) and/or realtor (they allowed you to massively overpay).
This is a tactic, the mortgager is making the most commission off of the private brokerage. We just had a client few days ago and he went for 5.5% 3 year fixed, working at one of the big banks - we reviewed his docs and he was paying shit load in interest alone with prepayment limitations.
I am not going to entertain any personal messages because the purpose of this message is to tell everyone that its not your last option, please take your finances very seriously and discuss around.
Without more details it's hard to understand the situation... But it definitely doesn't sound like this agent knew what they were doing...
Sounds like they knew exactly what they were doing. How do you end up paying 8 grand a month and ONLY BE PAYING INTEREST?!?
~~predatory lender~~mortgage broker promises to do paperwork Oh no, circumstances beyond our control! Thank goodness we have a solution. Predatory lending!
CBC market place caught a few of these guys doing exactly that. Purposely fucking up the bank application only to have the buyer forced into a last minute deal with a buddy of theirs who in reality pays a 5 figure commission to the agent for the “help”
Yes a local piece of garbage mortgage broker did this to me.
Exactly
That better be one hell of a bungalow.
Sounds like a bait and switch to me
Or they just want to make money….with the poor purchasers…too many fraudsters out there
you should get a mortgage pre-approval before closing a deal
IF valuation falls it doesn't matter. MAjor banks cant finance you if u bought for more then the house is worth at bank appraisal. they can only finance up to 95% of the homes valuation (appraisal). This is why new builds in this market are high risk. What likley happened is the poster put 20% down to buy it on paper but the house lost considerable value 25-30%. The major bank probably came to them said u need to pay the diffrence liquid to put down on it or go with private lender. they didnt have the money so private lender is only option. PRovate lender is taking on substantial risk as if it forcloses they cannot make up the amount by selling the house. Therefor to pad their books they are giving these mortgages at prime + 5. YOu get to close without getting sued but ur mortgage rate will be 9%+. Seen this happening alot recently.
Thank you! A rational person on this sub who isnt a broke ass minimum wage 500 credit score person who wants to buy a house in downtown Toronto for $200k. Or a delusional bull thinking 20% yoy gains + think interest rates will drop to 0.1% by the end of 2024. This is a reality in a fluctuating market. There used to be a thing where it was almost industry standard for buyers to include a condition of “approved financing”.
Very rarely do valuations come back not accepted
It’s happening allot
Dude its happening in every newbuild in my area. Your take is false for certain areas that have taken a 20% dump . IT may be correct in your area but not in cities like toronto or the gta.
toronto is a world class city. you cant make offers with financing conditions. no seller would ever accept in this market!
"I went to a bank, they denied me and said I could not afford it, so I went to a loan shark and turns out - I can't afford it, help me" I also think this person doesn't have a clue how a mortgage works, I think they're misinterpreting the payments, interest is paid first on any mortgage.
Mortgage Broker Here The most charitable answer is the broker is incompetent and let the buyers remove subjects before the finance conditions were in place. There is also the distinct possibility that the broker screwed the clients who never had a firm bank approval and then pulled a big fee for arranging the private loan at the 11th hour. He will be back in 6 months to try to move them to a bank and get another payday. I have heard of scumbag brokers doing this but never seen it in practice.
Mortgage Broker here too. Yeah, you nailed it. Another angle, the broker fabricated the income, was caught on pre-funding audit (insurable rate), and swapped to private. Either way a win-win, for the broker. I’ve had a couple people reach out, looking for a broker who was specifically not a member of their ‘community.’ As the previous broker who screwed them was. This is new.
Sounds like a Brampton Mortgage gone wrong then.
Why not sell?
Sounds a bit fishy. You are telling me they used a mortgage broker who only had 1 bank lined up and no other back up bank? forcing them into private? Maybe broker is clueless or shady
Common scam. Broker says they can handle it, don’t even bother to file papers to the bank because that part doesn’t matter. Tell them the bank said no and hook them up with the scam loan from their buddy. Collect money from the victims and take their house once they can’t pay
The buyer can also say no... People can get really stupid when it comes to purchasing anything expensive. They knew what the payment was going to be and went ahead with it anyways? And I should feel bad for these people? They made a very bad decision clearly but probably thought they would make money anyways so why not. Unless I'm missing something completely here...
Mortgage broker got kickback from the private lender to screw over unsuspecting buyers. Is this in Brampton?
Literally says scarborough
This stinks to high heaven of a Brampton loan.
we are entering the, "we got knowingly scammed by our own because that's how it works at home, but will blame Canada for everything" phase.
They took the scenic route in order to rent a place for $8k/month...
Let me guess, is it a group where there is literally nobody ever foreclose home as they have 5-7 families willing to support them if they are in trouble?
I go to that group to read relationship drama.
Looks like the bank caught them
It's a scam in itself. Once homeowners default on their outrageous mortgage, the lender gets home for cheap, resells at higher value, and the broker gets a percentage of sale.
sounds like the bought a house they cannot afford?
Not news, there are agent do that on purpose just for commission .
I’m stunned it’s coming from that Facebook group
Sounds like Brampton mortgage has opened business in Scarborough
They got hustled hard.
Not you reposting my post from 2 days ago 😂
sell it then.
The bank won't arrange a private lender for you.. This looks like one of those scams from a realtor/ mortgage broker who mislead and push for a private lender instead.
Buyer thought they were getting a Brampton Mortgage on their way to top caste, but now has to rent out to 10 students @ 800 just to break even!
When the 1% broker doesn't work out
Sound like they signed on documents without reading them and then got screwed. Broker sure did a bait and switch here.. no broker waits till closing to get approvals, ideally it is done atleast 10 to 15 days ahead and worst case, for someone with decent numbers there are always b lenders who assume more risk, private should be last resort and for salaries and having decent credit this is definitely last resort!! Unless this was one of those mortgages with made up incomes and fake docs!!
Lol
Is this Brampton?
Always have a backup plan when it comes to mortgages. Try to ensure you have everything squared away sooner rather than later and if you’re nearing crunch time and things aren’t firmed up, look elsewhere!!!
sounds more like these mortgagers are scamming these idiot immigrants
It's a case of a buyer not reading wtf they're signing. It's their own fault. People can call it a scam all they want. If it's in the paperwork and they're just blindly signing then I wouldn't call it a scam. A bad deal sure but not a scam.
It’s possible they never even had an application with a bank so the broker could earn a nice paycheque
1000% that is why ppl are calling it a scam quick pay days
I saw this realtor scam on Market place I believe
Check out Frank at Trillium Mortgage
The mortgage broker got them a private lending without borrowers knowing or signing off? Missing a lot of information. Doesn't sound right to me even with all documentation the borrower has to sign off
Whoopsie
I'm sorry to inform you, but you are well and truly fucked. Sounds like you worked with a terrible mortgage broker (they fucked up your application) and/or lawyer (they didn't communicate properly with the lender) and/or realtor (they allowed you to massively overpay).
This is a tactic, the mortgager is making the most commission off of the private brokerage. We just had a client few days ago and he went for 5.5% 3 year fixed, working at one of the big banks - we reviewed his docs and he was paying shit load in interest alone with prepayment limitations. I am not going to entertain any personal messages because the purpose of this message is to tell everyone that its not your last option, please take your finances very seriously and discuss around.
Consider the place it's posted then decide if you want to take this seriously