For most Canadians, owning a home is a lifelong ambition. Unfortunately, opportunistic companies have emerged as a relatively new and dangerous threat to homeowners who have fallen behind on their mortgage payments and may be facing foreclosure. Real-estate scams have become commonplace for desperate homeowners, and the COVID-19 pandemic may exacerbate the situation.

Most banks allow mortgage payments to be deferred or skipped for up to six months. During this time, however, the accrued interest will be added to the principal amount owed, increasing the total cost of borrowing.

Foreclosure fraud is a little more complex than title fraud but just as harmful. This kind of fraud happens when homeowners who are unable to make mortgage payments are tricked by fraudsters into transferring their titles in exchange for a loan. Usually, these loans have unrealistically attractive terms to entice desperate people. Unfortunately, the perpetrators commonly end up withholding payments once the title is signed over, and can then resell or remortgage the property with impunity. As we get closer to the end of mortgage deferral or grace periods, it’s conceivable that businesses and individuals who are still in financial difficulty may fall prey to these too-good-to-be-true scams.

According to the Financial Consumer Agency of Canada, “Foreclosure fraud usually happens when you are having problems making your mortgage payments. You may be tricked into transferring your property title to somebody to get a loan that will help you make your payments. Their goal is to persuade the victim to sign a first, second, or even third mortgage, as well as a builders' legal hypothec (which ensures that the property owner cannot sell without paying debts to builders and renovators) or lien, allowing the fraudster's name to appear on the title. After then, all the fraudster has to do to foreclose on the mortgage is cause a loan default under the guise of the victim's failure to comply with some ambiguous phrase. If the victim is unable to repay the lender, they will be forced to sell the property.

From a real estate statistic perspective

According to the Canadian Anti-Fraud Centre, there were 40,612 victims of fraud in Canada, with $106.4 million lost. Almost 3 out of 4 Canadians were targeted in scams or attacks, based on research conducted by Chartered Professional Accountants of Canada. Extortion, Identity, and Personal Information fraud were the top three types of fraud reported in 2020. These are troubling statistics in light of the potential uptick in financially vulnerable Canadians we may see soon.

How can we protect ourselves?

• keep your mortgage information in a safe place and shred old documents rather than throwing them in the trash

• contact your mortgage lender first if you are having difficulty making your mortgage payments

• consult your lawyer before giving another person a right to deal with your home or other assets

• research any company or individual who offers you a loan

• do a land title search with your provincial or territorial land registry office, which will show the name of the property owner and any mortgages or liens registered on the title

Across Canada, money-savvy millennials are taking the plunge into homeownership, knowing that it’s one of the best long-term investments that they can make. 

Whether you’re buying a house, condo, or townhome, the process can be a bit daunting, and you may not be sure of where to start. Don’t worry! Here are tips to smoothly find your dream house.

PREPARE FOR STICKER SHOCK

Yes, if you’re prepping to buy a home in 2021, expect to be shocked, and not in a good way. At this point, home prices have eclipsed old all-time highs in many parts of the country.

And even if they haven’t yet, there’s a good chance you’ll be paying more than the Zestimate or Redfin Estimate for the property in question due to limited inventory and strong home buyer demand.

In short, expect to shell out a lot of dough if you want a home in 2021, and that could often mean paying over the asking price, even if the original list price seems high.

SAVE FOR A DOWN PAYMENT AND OTHER EXPENSES

Before you start shopping for real estate, your first step is to save up money for a down payment. A “down payment” is the amount of money that you put towards the purchase of a home. In general, the larger your down payment, the easier it is to obtain a mortgage. As you start saving, you might ask: how much do I need to save for a down payment? The minimum amount depends on the home’s purchase price. In Canada, people typically spend between 5% and 20% of the purchase price on a down payment.

PREPARE YOUR FINANCES 

Get your finances in order before cruising the real estate listings. This process will help you estimate how much you can afford to buy, as well as organize critical documents required to support a mortgage application.

CHECK YOUR CREDIT SCORE

A credit score is a rating (between 300 and 900) used by lenders to assess the amount of risk they face in extending credit to you. In general, the lower your score, the less likely you are to be approved for a loan. Checking your credit rating allows you to see where you fall on the scale and figure out how to improve your credit score before submitting a mortgage application.

RESEARCH FIRST-TIME HOME BUYER INCENTIVES 

Speaking of saving money, don’t forget to take advantage of these first-time homebuyer incentives in Canada. It could save you some serious dough.

ORGANIZE YOUR DOCUMENTATION

There are three things a lender will look at before giving you a mortgage: your current assets (what you own), your income, and your current level of debt. During the application process, here are a few items that your mortgage lender may request from you:

Government-issued photo identification (driver’s license, passport, etc.)

Proof of employment and income (pay stubs, T4s, income tax returns, bank statements, etc.)

Proof of a down payment and where it will come from (e.g. savings account, RRSP, the sale of another property, gift, etc.). If a family member is contributing towards your down payment, you will also need a signed letter from them acknowledging the purpose of the gift, and confirming that it is non-repayable.

Information about any other assets

Information about your debts (e.g. credit card balances, car loans or leases, lines of credit, student loans) or financial obligations (e.g. spousal/child support)

Having these documents handy is a house-hunting hack – it will ultimately prevent you from scrambling to get your act together at the last minute.

GET A MORTGAGE PRE-APPROVAL

With your finances in order, the next step is to figure out how much you can afford. A mortgage calculator is a good place to start, as you can factor in the amount of your down payment, your amortization (repayment) schedule, total selling price, and so forth to come up with a budget.

Using a mortgage affordability calculator can help you estimate how much mortgage you can afford by crunching the numbers for some, or all of these factors.

THE BEST TIME TO BUY MIGHT BE LATER IN THE YEAR

Before you get too excited, or worried that time is running out, it might actually be in your favor to slow play this one.

Per Zillow, the best time to buy a home may be in late summer, including the months of August and September.

Basically, you’ve got the slow, cold months at the start of the year where there isn’t much inventory, followed by the strong spring housing market where everyone and their mother wants to buy.

Then you get a lull and perhaps even a dip in home prices during summer, which could be an attractive entry point.

You might even get lucky and snag a price cut with a lot less competition while other prospective buyers are on vacation.

That being said, get pre-approved NOW and set up your alerts for new listings ASAP and just be ready to pounce whenever.

START HOUSE-HUNTING!

You’ve got some money in the bank and a pre-approval in your hands. This is the exciting part of the home buying process – when you can start perusing the Canadian Multiple Listing Service (MLS) site in earnest.

Now hosted at Realtor.ca, this MLS provides a nationwide compilation of available real estate listings that you can filter in any number of ways: by location, size, type, amenities, price, and more.

If you aren’t sure whether a home you’re interested in is fairly priced or not, consider typing the address into Properly’s Home Value Report tool. This tool is designed to give homeowners an accurate snapshot of their home’s value, but can also give buyers valuable insight into recent sales data for their ideal neighborhood. Best of all, it’s free.

LEARN MORE ABOUT THE PROPERLY

It’s at this stage that you’ll want to seriously consider working with a real estate agent. This is not mandatory—buyers are allowed to manage their sales—but it’s advised, especially for first-timers.

Real estate agents have expert information on every step of the process which can help relieve stress, and they are also part of a professional network of inspectors, insurance agents, and so forth who may become part of your team.

Buying your dream house can be a daunting experience for anyone. Long before the fun part—the actual search for your dream home—you have to figure out your finances, identify and exploit saving opportunities, get pre-approved for a mortgage, and hire your real estate agent, lawyer, and other professionals.

It might seem overwhelming, but  it’s worth it to become a homeowner with your dream house. This guide will help you get one step closer to having the keys to your new home in hand. Good luck!

Your expertise is essential as your clients seek encouragement, ways to keep spirits high, and cost-cutting tips. As a fiduciary, you can assist them in navigating the complexities of a new normal, particularly if financial difficulties are a reality and they are at risk of losing their home due to the inability to pay their mortgage.

It is critical to approach this conversation with your sphere from a place of contribution, care, and sensitivity. Offer resources, avoid making assumptions and simply let them know you are willing to help in any way you can. Start by sharing the measures we’ve outlined below from the Consumer Finance Protection Bureau to help you discuss this important topic.

When is it too late to stop a foreclosure?

The only time it is too late to stop a foreclosure is when the property is sold at auction to a new party, people who are unable to repay their loans often file for bankruptcy because it stops the foreclosure process. Even on the day, the property is scheduled to be sold, the foreclosure can be halted. A homeowner can stop foreclosure until the property is sold at auction.

After 90 days have passed since the last payment, the lender will usually take action against the homeowner. After 90 days, the lender sends the homeowner a delinquency notice. The homeowner can choose between two options. They can either pay the mortgage amount and avoid foreclosure, or they can continue to make no payments, causing the lender to foreclose on the property.

After 120 days and no payment has been made by the borrower, the lender is required to issue a notice indicating their intent to foreclose on the property. Following that, the foreclosure attorney will publish a notice of the impending sale in a legal newspaper. The notice period will last 5 weeks, after which the property will be sold at a public auction. During the 5-week notice period, the homeowner has the option of stopping the foreclosure by making up all missed payments (including late fees and attorney fees) or working with an attorney to stop the foreclosure.

There are several mortgage relief options for clients who are at risk of foreclosure.

1. Forbearance

Mortgage forbearance is an agreement made between a lender and a borrower to suspend or reduce payments for a specific period as they strengthen their financial situation. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, homeowners who are experiencing financial hardship directly or indirectly because of the national emergency, are entitled to forbearance for 180 days (and additional protections) if they have a federally or Government Sponsored Entity-backed mortgage. If your clients are unsure or do not believe they qualify for mortgage forbearance under the CARES act, they should not be deterred. They must call their lender right away to discuss this option. 

2. Reinstatement

Forbearance does not mean loan payments are forgiven or eliminated. When the forbearance period concludes, your clients will have to pay back the debt they have accrued during the period. When they pay this debt back in one lump sum, it will result in the reinstatement of their original mortgage loan terms; this is the fastest form of forbearance repayment. The other option they can discuss with their lender is a repayment plan; their lender will be fully versed on these options and can discuss which would make sense for their particular situation.

3. Repayment Plan

With repayment plans, lenders allow borrowers to gradually pay back any debt incurred during a forbearance period by increasing the borrower’s monthly payments until the additional debt has been repaid. Repayment plans vary from loan to loan.

4. Loan Modification

If the reinstatement or repayment is not feasible for your clients, their lender may be willing to amend their mortgage in another way. The Consumer Financial Protection Bureau has more information on various loan modification options, as well as other helpful advice like how to avoid coronavirus-related scams.

Across Canada, money-savvy millennials are taking the plunge into homeownership, knowing that it’s one of the best long-term investments that they can make. 

Whether you’re buying a house, condo, or townhome, the process can be a bit daunting, and you may not be sure of where to start. Don’t worry! Here are tips to smoothly find your dream house.

Prepare for Sticker Shock

Yes, if you’re prepping to buy a home in 2021, expect to be shocked, and not in a good way. At this point, home prices have eclipsed old all-time highs in many parts of the country.

And even if they haven’t yet, there’s a good chance you’ll be paying more than the Zestimate or Redfin Estimate for the property in question due to limited inventory and strong home buyer demand.

In short, expect to shell out a lot of dough if you want a home in 2021, and that could often mean paying over the asking price, even if the original list price seems high.

Save for a Down Payment and Other Expenses

Before you start shopping for real estate, your first step is to save up money for a down payment. A “down payment” is the amount of money that you put towards the purchase of a home. In general, the larger your down payment, the easier it is to obtain a mortgage. As you start saving, you might ask: how much do I need to save for a down payment? The minimum amount depends on the home’s purchase price. In Canada, people typically spend between 5% and 20% of the purchase price on a down payment.

Prepare Your Finances 

Get your finances in order before cruising the real estate listings. This process will help you estimate how much you can afford to buy, as well as organize critical documents required to support a mortgage application.

Check Your Credit Score

A credit score is a rating (between 300 and 900) used by lenders to assess the amount of risk they face in extending credit to you. In general, the lower your score, the less likely you are to be approved for a loan. Checking your credit rating allows you to see where you fall on the scale and figure out how to improve your credit score before submitting a mortgage application.

Research First-Time Home Buyer Incentives 

Speaking of saving money, don’t forget to take advantage of these first-time homebuyer incentives in Canada. It could save you some serious dough.

Organize Your Documentation

There are three things a lender will look at before giving you a mortgage: your current assets (what you own), your income, and your current level of debt. During the application process, here are a few items that your mortgage lender may request from you:

Government-issued photo identification (driver’s license, passport, etc.)

Proof of employment and income (pay stubs, T4s, income tax returns, bank statements, etc.)

Proof of a down payment and where it will come from (e.g. savings account, RRSP, the sale of another property, gift, etc.). If a family member is contributing towards your down payment, you will also need a signed letter from them acknowledging the purpose of the gift, and confirming that it is non-repayable.

Information about any other assets

Information about your debts (e.g. credit card balances, car loans or leases, lines of credit, student loans) or financial obligations (e.g. spousal/child support)

Having these documents handy is a house-hunting hack – it will ultimately prevent you from scrambling to get your act together at the last minute.

Get a Mortgage Pre-Approval

With your finances in order, the next step is to figure out how much you can afford. A mortgage calculator is a good place to start, as you can factor in the amount of your down payment, your amortization (repayment) schedule, total selling price, and so forth to come up with a budget.

Using a mortgage affordability calculator can help you estimate how much mortgage you can afford by crunching the numbers for some, or all of these factors.

The Best Time to Buy Might Be Later in the Year

Before you get too excited, or worried that time is running out, it might actually be in your favor to slow play this one.

Per Zillow, the best time to buy a home may be in late summer, including the months of August and September.

Basically, you’ve got the slow, cold months at the start of the year where there isn’t much inventory, followed by the strong spring housing market where everyone and their mother wants to buy.

Then you get a lull and perhaps even a dip in home prices during summer, which could be an attractive entry point.

You might even get lucky and snag a price cut with a lot less competition while other prospective buyers are on vacation.

That being said, get pre-approved NOW and set up your alerts for new listings ASAP and just be ready to pounce whenever.

Start House-Hunting!

You’ve got some money in the bank and a pre-approval in your hands. This is the exciting part of the home buying process – when you can start perusing the Canadian Multiple Listing Service (MLS) site in earnest.

Now hosted at Realtor.ca, this MLS provides a nationwide compilation of available real estate listings that you can filter in any number of ways: by location, size, type, amenities, price, and more.

If you aren’t sure whether a home you’re interested in is fairly priced or not, consider typing the address into Properly’s Home Value Report tool. This tool is designed to give homeowners an accurate snapshot of their home’s value, but can also give buyers valuable insight into recent sales data for their ideal neighborhood. Best of all, it’s free.

Learn more about the Properly

It’s at this stage that you’ll want to seriously consider working with a real estate agent. This is not mandatory—buyers are allowed to manage their sales—but it’s advised, especially for first-timers.

Real estate agents have expert information on every step of the process which can help relieve stress, and they are also part of a professional network of inspectors, insurance agents, and so forth who may become part of your team.

Buying your dream house can be a daunting experience for anyone. Long before the fun part—the actual search for your dream home—you have to figure out your finances, identify and exploit saving opportunities, get pre-approved for a mortgage, and hire your real estate agent, lawyer, and other professionals.

It might seem overwhelming, but  it’s worth it to become a homeowner with your dream house. This guide will help you get one step closer to having the keys to your new home in hand. Good luck!

Your expertise is essential as your clients seek encouragement, ways to keep spirits high, and cost-cutting tips. As a fiduciary, you can assist them in navigating the complexities of a new normal, particularly if financial difficulties are a reality and they are at risk of losing their home due to the inability to pay their mortgage.

It is critical to approach this conversation with your sphere from a place of contribution, care, and sensitivity. Offer resources, avoid making assumptions and simply let them know you are willing to help in any way you can. Start by sharing the measures we’ve outlined below from the Consumer Finance Protection Bureau to help you discuss this important topic.

When is it too late to stop a foreclosure?

The only time it is too late to stop a foreclosure is when the property is sold at auction to a new party, people who are unable to repay their loans often file for bankruptcy because it stops the foreclosure process. Even on the day, the property is scheduled to be sold, the foreclosure can be halted. A homeowner can stop foreclosure until the property is sold at auction.

After 90 days have passed since the last payment, the lender will usually take action against the homeowner. After 90 days, the lender sends the homeowner a delinquency notice. The homeowner can choose between two options. They can either pay the mortgage amount and avoid foreclosure, or they can continue to make no payments, causing the lender to foreclose on the property.

After 120 days and no payment has been made by the borrower, the lender is required to issue a notice indicating their intent to foreclose on the property. Following that, the foreclosure attorney will publish a notice of the impending sale in a legal newspaper. The notice period will last 5 weeks, after which the property will be sold at a public auction. During the 5-week notice period, the homeowner has the option of stopping the foreclosure by making up all missed payments (including late fees and attorney fees) or working with an attorney to stop the foreclosure.

There are several mortgage relief options for clients who are at risk of foreclosure.

1. Forbearance

Mortgage forbearance is an agreement made between a lender and a borrower to suspend or reduce payments for a specific period as they strengthen their financial situation. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, homeowners who are experiencing financial hardship directly or indirectly because of the national emergency, are entitled to forbearance for 180 days (and additional protections) if they have a federally or Government Sponsored Entity-backed mortgage. If your clients are unsure or do not believe they qualify for mortgage forbearance under the CARES act, they should not be deterred. They must call their lender right away to discuss this option. 

2. Reinstatement

Forbearance does not mean loan payments are forgiven or eliminated. When the forbearance period concludes, your clients will have to pay back the debt they have accrued during the period. When they pay this debt back in one lump sum, it will result in the reinstatement of their original mortgage loan terms; this is the fastest form of forbearance repayment. The other option they can discuss with their lender is a repayment plan; their lender will be fully versed on these options and can discuss which would make sense for their particular situation.

3. Repayment Plan

With repayment plans, lenders allow borrowers to gradually pay back any debt incurred during a forbearance period by increasing the borrower’s monthly payments until the additional debt has been repaid. Repayment plans vary from loan to loan.

4. Loan Modification

If the reinstatement or repayment is not feasible for your clients, their lender may be willing to amend their mortgage in another way. The Consumer Financial Protection Bureau has more information on various loan modification options, as well as other helpful advice like how to avoid coronavirus-related scams.

For most Canadians, owning a home is a lifelong ambition. Unfortunately, opportunistic companies have emerged as a relatively new and dangerous threat to homeowners who have fallen behind on their mortgage payments and may be facing foreclosure. Real-estate scams have become commonplace for desperate homeowners, and the COVID-19 pandemic may exacerbate the situation.

Most banks allow mortgage payments to be deferred or skipped for up to six months. During this time, however, the accrued interest will be added to the principal amount owed, increasing the total cost of borrowing.

Foreclosure fraud is a little more complex than title fraud but just as harmful. This kind of fraud happens when homeowners who are unable to make mortgage payments are tricked by fraudsters into transferring their titles in exchange for a loan. Usually, these loans have unrealistically attractive terms to entice desperate people. Unfortunately, the perpetrators commonly end up withholding payments once the title is signed over, and can then resell or remortgage the property with impunity. As we get closer to the end of mortgage deferral or grace periods, it’s conceivable that businesses and individuals who are still in financial difficulty may fall prey to these too-good-to-be-true scams.

According to the Financial Consumer Agency of Canada, “Foreclosure fraud usually happens when you are having problems making your mortgage payments. You may be tricked into transferring your property title to somebody to get a loan that will help you make your payments. Their goal is to persuade the victim to sign a first, second, or even third mortgage, as well as a builders' legal hypothec (which ensures that the property owner cannot sell without paying debts to builders and renovators) or lien, allowing the fraudster's name to appear on the title. After then, all the fraudster has to do to foreclose on the mortgage is cause a loan default under the guise of the victim's failure to comply with some ambiguous phrase. If the victim is unable to repay the lender, they will be forced to sell the property.

From a real estate statistic perspective

According to the Canadian Anti-Fraud Centre, there were 40,612 victims of fraud in Canada, with $106.4 million lost. Almost 3 out of 4 Canadians were targeted in scams or attacks, based on research conducted by Chartered Professional Accountants of Canada. Extortion, Identity, and Personal Information fraud were the top three types of fraud reported in 2020. These are troubling statistics in light of the potential uptick in financially vulnerable Canadians we may see soon.

How can we protect ourselves?

• keep your mortgage information in a safe place and shred old documents rather than throwing them in the trash

• contact your mortgage lender first if you are having difficulty making your mortgage payments

• consult your lawyer before giving another person a right to deal with your home or other assets

• research any company or individual who offers you a loan

• do a land title search with your provincial or territorial land registry office, which will show the name of the property owner and any mortgages or liens registered on the title