Rent Real EstateFraud and Flexibility Associated With Mortgages
Mortgage Investors Lose
Ontario Provincial Police recently arrested a 34-year-old Southern Ontario man in connection with a million-dollar scam that involved mortgage fraud. Thirty-eight victims from a small rural community lost in excess of $1 million dollars.
Intensive investigation revealed that as well as defrauding investors in a fraudulent loan scheme, the suspect enticed private investors to invest in private mortgages, which were fraudulent because the properties being mortgaged already had existing legitimate mortgages. Investors received monthly interest payments until the scam fell apart. The frauds were committed under the business name Lawrence Benniger and Associates.
When it comes to investing, even opportunities close to home must be looked at cautiously.
Financing Flexibility for Recreational Properties
Mortgage Intelligence Inc., Canada"s largest mortgage broker, is increasing financing flexibility and eliminating some financial obstacles to second home ownership with the introduction of their irelax mortgage.
Reportedly the first mortgage of its kind in Canada, the irelax mortgage product "offers rates and features that are currently unmatched in the industry on owner-occupied recreational properties, including ski chalets, cottages, and non-winterized or seasonal properties with year-round access in known vacation areas."
"Secondary properties are generally considered less than desirable for traditional lending institutions," says Bob Ord, President and CEO of Mortgage Intelligence. "These purchasers are often advised to take out an equity loan or place a second mortgage on their principal residence to finance their recreational property. With irelax, Canadians can bypass conventional lending criteria and open the door to ownership."
In 2002, Mortgage Intelligence Inc., a wholly-owned subsidiary of GMAC Residential Funding of Canada, placed approximately C$5 billion in mortgages. Describing itself as "the largest and fastest growing mortgage broker in Canada," the company has almost 500 independent consultants, associates and assistants in offices throughout British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, and the Atlantic Provinces.
Buyers and owners may arrange up to 85 per cent financing on recreational property, to a maximum of $600,000, on 3-year and 5-year fixed mortgages or 5-year variable mortgages. Rates are guaranteed for 60 days.
Mortgage Intelligence is intent on providing easier access to cottage and vacation home financing as Canadians gear up for another year of strong recreational property sales across the country that is attributed to baby boomers.
According to the Survey of Financial Security produced by Statistics Canada, ownership patterns for recreational property have remained fairly static despite greater affordability levels. In 1999, approximately 7 per cent of households (823,000) owned vacation homes, up from under six per cent of households (464,000) in 1977. Although there was an increase in the overall numbers, as a percentage of the population, growth has been limited. However, baby boomers--the almost
10 million Canadians born between 1947 and 1966--are expected to increasingly fuel demand for recreational properties for several reasons.
They have the money.
The desire for a better lifestyle includes owning a second home in the minds of many Canadian baby boomers.
Many boomers will buy recreational property with the intention of eventually retiring there.
Recreational property represents renewal, family togetherness and "escape from a world gone crazy."