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Monday, December 26, 2016

In Like Flynn and Making It Ours - Part 2, and Getting Back Up and Running

So, we finally completed the upstairs rooms and have pictures to show! So, without further ado:

In this photo arrangement that Steph prepared, we have the upstairs hall, one of the guest bedrooms, and the weight/craft room. 

In this group we have the main master bedroom, the largest guestroom with the attached ensuite bathroom, and another cute shot of Viktor making himself at home in the lid of one of my stamp boxes. 

The business is now up and running, making a slow but sure recovery from the disruption caused by the move. E-bay has, once again behaved unreasonably with regard to our move, penalizing us for not shipping orders while our stock was inaccessible. This, despite putting the store on formal vacation, and communicating with our customers. So it has forced us to finally decide to get our store on Auctiva Commerce set up once and for all, so that we build a business that we actually have complete control over. I have spent much of today learning how to use the many features of the store and trying to get most of the critical functions set up so that we can begin formulating our Google Adwords campaign. 

Exciting times ahead!

Thursday, December 15, 2016

In Like Flynn and Making it Ours

I had posted an update to the ongoing saga on the house on Facebook, but had not written a post to say that we had indeed been approved for our financing, in the nick of time, and took possession of the house in the evening of December 9. That evening, and the next day, I unloaded the truck, with the kind help of the neighbour across the corner from us on the china cabinet and the mattresses, as I was simply out of gas by the time I got to these last 2 items.

Steph immediately got to work, feverishly organizing the rooms on the main floor, and oh what a fantastic job she did. When we bought this house, we had barely enough furniture for 2 or 3 rooms. Thanks to her vision and prowess at acquisition, she managed to acquire all the pieces that we needed to fully furnish the house. I went to work getting our new office organized, while she did the rest of the main floor. Now, after just 6 days, I am pleased to say that we have the main floor completed, and just the upstairs bedrooms to go. We shall celebrate this weekend with our first lobster meal since arriving here!

Without further ado, I give you pictures of the completed rooms:

Living Room

The art-deco red club chair was easily Steph's best score. I was also very happy to be able to finally put up the 1885 copper etching of Poet's Corner of Westminster Abbey, by the famed 19th century etcher, Axel Haig. That etching has been in my family since 1974, when my parents bought it at an auction. So it has literally been around the world. 

My pride and joy, one of two Queen Anne wing-back chairs that my parents bought in the same year as the etching. My brother has the other chair. Viktor loves to climb on it, as you can see here. 

Steph wasted no time in getting our Christmas tree up. We couldn't put one up last year because of Viktor, but so far he has not tried to climb it. 

Our favourite feature of the living room has to be the working fireplace, which we used on our second night, and every night since. 

Dining Room

The dining room as seen from the front hall.

The mantle and built in cabinet. Unfortuntely the old coal fireplace is not working, but maybe we can get it restored eventually. Steph put up the seating chart from our wedding reception above the altar chest on the right.

I insisted on bringing the rosewood china cabinet that my parents gave me almost 16 years ago. It has always been a favourite piece of mine. It turns out to have been a great place to display our "nerdy stuff" as well as Steph's books.

Front Hall

A little display that Steph made on the radiator cover. The round mirror was one of 2 that Ikea had on sale for $20 each because of the green colour. However we knew it would work here, so we bought them. 

The rest of the hall looking toward the sunporch. 

It is balls cold right now in this porch, but it should make a nice sitting area once the temperatures warm up. 

The glass windows extend around the right side of the porch as well. 

Despite the cabinetry being very dated, the layout is still very user friendly. The addition of the portable island in the centre makes it a very efficient space. We plan to install a dishwasher that we bought with us that is currently out in the garage. But that is in a month or two, once we sort our finances and sales get back up to the level they were at before the move.

The little built in spice rack is the perfect place to display my collection of vintage tobacco tins.

The stove and pantry, with the laundry room door on the right.

The 1930's art works well on this wall. The sign on the laundry room door that Steph made reads "Laundry today or naked tomorrow.", which I thought was clever and funny. 

Laundry Room

Tons of storage, and a good place for the cat box. Off to the right is a nice powder room. It is so small though that there is no way to get a good picture of it, so I didn't bother. But it's there.


Looking in from the hall. This room is directly across from the kitchen and is the last room before the stairs. Steph's desk is at the back, while mine is in the foreground. These wide desks from Ikea were just the thing to give us plenty of space for the printer, scanner and computers, while having space to actually work on stamps too. I love the deep crimson walls with white trim.

I put up shelving behind me for the larger Canada items, supplies and a neat little workstation for the ultraviolet light, so that I don't have to keep hauling it out when I want to use it. I was also able to finally hang another heirloom piece: a copy of Queen Alexandra's address to England upon the death of her husband, King Edward VII. Steph's pop-art worked well here too. 

Easily the best feature of this room is the built in closets whose width extends fully into the wall on both sides, so I can store the stuff I don't need to access for a long time out of sight. The main stock can be placed where I can easily access it, and I can lock the doors. I put up shelving for the 50,000 Nigerian covers that I bought last year. 

Viktor watching me from my desk, as I filled the order backlog. 

The bulk of the Canada stock to 1971, British West Africa on the top shelf, and pre-1936 Nigeria in the albums. Each red box holds 1,000 stockcards and most of these boxes are full. Most stockcards can hold as many as 20 stamps. 

The rest of Canada after 1971, the rest of Nigeria after 1936, some general Commonwealth, worldwide, and our catalogues on the bottom shelf.

And that is it for now, until we finish the bedrooms.

Wednesday, December 7, 2016

I Think We May Actually Have A Solution - The Lending Industry Part 3

So on Monday we still had no word from anyone, except the private lender, that was offering only 65% loan to value, and charging 12% on a 1 year term. So needless to say we were pretty dismayed to have to go to sleep with total uncertainty and only 2 days to go before the expiry of our second extension.

By Tuesday morning, I was seeking out the local lawyers to try and get some independent representation, as I figured we were going to need it at the rate things were going. But every lawyer I spoke to was too busy to help us. There was one though who was kind enough to let me bend her ear for 10 minutes at no charge and sympathize with our plight.

Later in the morning, we finally got word on two fronts. A local bank processed our application and contacted me for additional documents, which I provided. Then I was requested to come into the branch to meet with the loan officer. Could this actually be? A 5 year mortgage at 20% down and under 3% interest?

Then Laking got back to me to tell me that Equitable was deliberating over the new sales report and he had no updates. I backed off completely, given the fact that I had done everything I could do, and the fact that it looked very much like we would have an approval by the end of the day.

So at 4 pm, I met with the loan officer at the bank. I walked her through the documents I supplied her, explained my business, brought one of my stockbooks with me, so that she could actually see what my business is about, and further explained my relationship with my old firm. When the meeting was over, I had the approval! And, I was, get this, given a Mastercard with a $16,000 limit. Go figure. Two days ago, nobody would approve us, and now we are not just being offered a mortgage, but more opportunity to get in more debt as well. What did I tell you?

So after sending the approval to the realtor, it has now become a waiting game: waiting for the sellers to agree to extend the close until the funding comes through from the bank. Hopefully, it will come through by Friday, which will allow us to move in on Saturday morning. But it might not come through until next Monday, December 12.

This morning, I woke up to the following e-mail from Laking:

Hi Chris,

I have another update for you on the application with Equitable Bank.
With all the reports we have sent they are still having a hard time being comfortable with the income.  They have been trying all day to figure out a way to make this work as they do see some strong pieces of the application but their main concern is income coming in.  I explained to them in every way I could think to show them that the business is consistent.  They did settle on how they would be willing to proceed.

So they will proceed but here is how it would work.
They have a different mortgage product that is more flexible with income but it requires 35% down instead of 30.
I know you wanted to proceed with a smaller down payment but based on what you have in the bank now, what you have in PayPal and your deposit you technically have enough.
I realize it wouldn't leave you with much left over.
The interest rate would also be slightly different at 3.94%
They also would need something to verify that you own the business.  So that could be business registration documents, articles of incorporation etc.. I'm sure you would have that.
Since they proposed this late today I don't have any paperwork from them yet to see the full terms but that's the summary they gave me to see if you would be interested.  If you needed to use any money from a credit facility to cover any part of the down payment or legal fees they are ok with that as well.

While I was waiting for updates today I did engage another lender in conversation about your file to see if there was any interest.  I realize time is running out but also thought we had to give this every chance we could.
The lender I was speaking to was TD.  Since you have a lot of business with them I thought they might be willing to help.  Based on my conversations with them they sounded very interested and wanted to have a chance to get this done for you.
They advised me they would have an answer to me sometime tomorrow morning.
So if they come back with an approval then they will have all he documents and there is a chance it could come together very quickly.

I know you had indicated the deal needed to be funded by end of day tomorrow.
I was hoping that if we could at least get to the point that everything was solid and ready to go to the lawyer that the vendors would continue to work with you.  It won't take long once it gets to the lawyers office.

So if you are interested in Equitable Banks offer let me know and I can have advise them to proceed tomorrow.
Also, based on what TD was saying today they may have a good option tomorrow too.


So, these bastards at Equitable are supposedly concerned about my income and ability to pay. No matter what I send them, they cannot get satisfaction. So what do they do? With a day to go, they come back offering a deal with a higher down-payment, and they are completely fine if I go and borrow the entire 15K on Visa, knowing full well that what this will do is create another debt that will require at least $700 a month in payments. So in other words, they are concerned about my ability to pay them $600 a month, even with a small cash buffer in the bank, but they are not at all concerned about my ability to pay $1,300+ a month, with absolutely no cash buffer in the bank, because they took it from me in the form of a higher downpayment. Sound insane? It isn't if you remember that there is no honour among theives. I'll explain.

Equitable only cares about itself. They know that Visa cards are unsecured debt, and that if they squeeze me for more downpayment at the 11th hour, I will probably give in and borrow the rest on Visa because I'm desperate. They know that if I run into problems paying that much debt, I will probably default on my Visa before I default on the mortgage. So even if they have legitimate concerns about my ability to pay, they are quite willing to put my credit rating at risk, and possibly my card issuer at risk, as long as they get their money. It is sick. Just sick.

So, while I am deeply thankful that this situation will soon be resolved, and Steph and I are both touched by the outpouring of support we have received from our friends, this does not change my opinion about the system, or the disgust that I feel. It will be a long time before I am over this. I read an article yesterday about how the government's tightening of mortgage rules is creating a "debt bubble". It is a typical story about how the government, in it's zeal to solve a problem (the housing bubble) that it created (through artificially low interest rates), takes action that doesn't really solve the problem, and just creates new ones. People need to have somewhere to live, and rightly or wrongly, most people past a certain age do not want to rent. So it follows that people will do whatever it takes to buy a house and get the loan they need. The result? The growth of a whole lending industry that operates outside government regulations, and takes advantage of people who do not necessarily understand how unfavourable these financing arrangements really are. The result is a lot of misery, and a rise in personal bankruptcies. People either get mortgages at ridiculously low rates, or they wind up paying obscenely high rates. But in no way are the consumers actually protected.

It is really time for an overhaul that takes the big economic picture into account. By all means don't let people who make 100K a year buy million dollar homes - because those people really can't afford it. But don't disqualify people who are currently renting from obtaining mortgages when the mortgage payments, plus utilities are equal to or less than they rent that they have an established track record of paying. Stop treating us like children. Responsible adults will chew through bricks if they had to do it to keep their family home. Yes, some will default, which is why we have mortgage insurance and why banks can seize and sell defaulted homes. But making the rules as unreasonable as they are, and biased in favour of salaried employees, they are locking a lot of very deserving people out of the housing market, and this is not good for the overall economy. People who plant roots and establish a home spend more - on their home, and in their community. Maybe that shouldn't be so, but it is a fact. Just look at any neighbourhood where predominantly all the houses are owned, versus one that is mostly rental. Which one looks better? Which one has a wider array of local businesses? One of the reasons is control. I've rented in places I've loved, only to be told 6 months out that I have to move because the landlord wants to sell the place, or move their nephew in. How willing will you be to invest in your community if you know that you could have to move two months down the road?

That brings me to the end of my rant. Hopefully the next time I write, it will be from my desk in the office of our new home.

Monday, December 5, 2016

The Ugly Side of the Lending Industry Part 2

It is now 5:10 pm on Monday, December 5, and still no word. Our closing date came and went, we blew through one extension on Friday, and got a second extension to close of business on Wednesday. If we can't close, we will likely be sued by the sellers. What a wonderful start to life in New Brunswick!

I had written  the post below a few days ago, and didn't want to post it until I knew for sure whether or not we are approved. But now I honestly don't give a flying fig. So here it is...

It is now 5:18 pm on Friday, December 2, two days after our scheduled closing date. We are now spending our third night in  hotel, and are having to extend our truck rental. With us heading into the weekend, we are probably looking at a close now of December 7, and will be out over $1,500 that we had set aside as our buffer for our first couple of months here.

What has happened over the past three days has broken my spirit, and I never thought that possible. Those people who know me well have watched me deal with heartbreaking loss:
  • Bankruptcy at age 28.
  • 2 divorces.
  • Death of my first wife.
To name just a few. Through it all, I have usually managed to remain optimistic, and roll with the punches. But this time, I just feel as though something has fractured deep within me. I think its that I just didn't expect lenders to treat me so badly given my background and experience as a Chartered Accountant. 

Just after writing this, Steph and I decided to go out to the Christmas festival downtown, instead of wallowing in anger, bitterness and self-pity. We actually saw some nice sights and managed to meet the local stamp dealers, which made me feel better. So it's actually now Saturday morning at 8:37, and I'm not feeling quite so broken as I was last night. 

The bottom line is that we now have until the end of Wednesday to close this deal or lose the house, our $6,600 deposit, and possibly get sued for the difference between what the owners finally sell the house for, and what we agreed to pay for it. My worry of course, is that they will put it back on the market and take, say a $30,000 haircut on it to get rid of it and will come after us for the other $30,000. They are already talking about charging us for extra living expenses while they are staying here in town, so we'll see. But the thrust of today's post is to expose more of the ugliness of the lending industry in this country. The four aspects I want to focus on are:

1. Not taking responsibility unless threatened with legal action.
2. Not acting diligently to protect your client's interests, either because of laziness or ignorance. 
3. Predatory lending practices.
4. It is not about your ability to pay, and never was. 

Not Taking Responsibility Unless Threatened

My last communication with Laking had been late Friday, November 25, 2016, when he told me he almost had an answer from Equitable Bank. For the next five days, complete radio silence. I later learned that he was notified on Monday by the appraisal company that the appraisal had been requested by another lender, so that he would have known then that I had started working with someone else. I guess he figured that since I had done this, that he was off the hook and could just walk away from the mess. I don't know for sure. But I would imagine that you would all agree that 5 days under these circumstances is an inexcusable length of time to go without calling your client, after you have screwed things up so badly for them. 

We left Drummondville on Wednesday morning very early, it turns out - just after I published the last post, and drove the entire way to Saint John, arriving at 4:45pm. along the way, I had many discussions with our new broker, Debbie, who did a great job of keeping me informed. However, the news was not good: one credit union was only willing to use our net business income, rather than our gross income, even though many of our write-offs are for things that require no future cash outlay. This is the inherent double standard in lending:

An employee, who can lose their job tomorrow, and lives from paycheque to paycheque on $75,000 per year can qualify for a mortgage, no problem, even though he or she brings no real security to the table. But a self-employed person like myself, who has the same or greater income generating potential, and lives frugally, investing any monthly surplus in the business, or saving it for the slower months, and who has strong business connections can't. 

But I digress. We went to see our lawyer as soon as we arrived, and extended the contract until Friday, December 2. We then found the closest motel and checked in. It was one of those places from the 1950's, and looked it. But we settled in and made the best of it. In the morning I woke up early, yelled "fire in the hole" inside my head, and sent the following e-mails to the bank, and Laking:

Good morning Liane

I am writing to inform you that I will be taking legal action against Optimum Mortgage and the Canadian Western Bank due to your decision not to honour the commitment that you issued on September 29, 2016.  I will also be filing a formal complaint with the Office of the Superintendent of Financial Institutions. 

I have attached the financing letter that Mr. Laking sent my realtor. It clearly states that we were approved, subject only to the appraisal and nothing else. Your four page commitment letter also states that we would only be required to supply a 25% downpayment on closing. Therefore Optimum is in breach of its contract with me, and there is a contract, because all four legal ingredients are present, with the key one being an exchange of consideration. That occurred when I paid for the appraisal that Optimum claimed ownership of. 

I will of course, be willing to drop these actions if you send funding to my lawyer Seamus Cox, no later than Friday, December 2, 2016, as originally agreed. His e-mail is 

Otherwise I will proceed and hold Optimum accountable for all financial losses that I stand to suffer as a result of Optimum's failure to honour its contract with me. I had hoped that it wouldn't come to this and had attempted to resolve this through reasoned discussion, but unfortunately it was for nought.


Chris McFetridge, CPA, CA

Hi Mike

Here is an e-mail I forwarded to Liane at Optimum. You will be hearing further in due course from the oversight body here in NB that regulates mortgage brokers. 



We decided to hit the Walmart, as we stank from wearing the same clothes for three days in a row, and while in the mall, we found a nice little restaurant. Over breakfast, we received the following from Laking:

Hi Chris,

I am very sorry to see what this has come to.
I did figure you would proceed with the options we went over on Friday where you could top up your down payment.  I realize that wasn't ideal but it would work to complete the transaction.  I am not sure what your interest rate is on the credit facility we discussed you using for that but if it's higher than the interest rate on the mortgage I would be willing to help with those costs in order to help you close this transaction.  If that's something you are interested in please let me know.  I know you have advised that you should have the extra funds in the next 2 months hopefully.

Monday morning I was advised you had asked for a copy of your appraisal which Optimum agreed to release to you.  I thought perhaps you may have been seeking and found alternate financing.

Equitable Bank has come through with an approval.  However the best they can do is 30% down, but they are willing to offer a better interest rate of 3.69% and a small line of credit secured to the property. 

I apologize, that last email sent without me being finished typing.

The line of credit would be revolving and work as a traditional line of credit would.
To proceed with this approval they would want additional documents on top of what I have.  They want 12 months history of bank statements and I have 5-6 on your accounts.

If this is something you are interested in proceeding with please let me know.  I will assist you anyway possible to complete the transaction. Obviously we would need some time to complete the closing but we could work together to make it happen as soon as possible.

Please let me know if either of the options mentioned can be proceeded with.

Mike Laking

That was way, way more motivational than I could have imagined. But why did it have to come to this? Steph and I were understandably skeptical about this "approval". What does it really mean when he says "that we are approved, but they need to see another 6 months of bank statements"? It sounds like the same old BS all over again. We had already lost a ton of credibility with the sellers the first time things fell through, and I couldn't have this happen again, so I sent him the following reply:

Hi Mike

I appreciate your attempt to reach out. It is indeed a very unfortunate situation with the sellers in the exact same situation as us with a truck packed ready to move to Ontario. Both they and us are now past the closing date and are incurring additional expenses. 

The thing is the sellers have now lost all confidence in our ability to close this thing. I cannot go back to them with a deal unless it is iron clad. I appreciate that Equitable has come back to you with a deal, but it sounds just like more of the same in the sense that they want another 6 months of bank statements. I can provide those, but what I can't have is a situation where you tell me it is approved, I go back to the sellers and tell them this and then Equitable changes the terms and the whole thing is unworkable. 

So I will hear back today or tomorrow about two other applications I have made in the meantime. If you want to proceed with Equitable  because you are absolutely certain that we will be approved no matter what, then I will be happy to let you do so, provided that I hear back on the other two applications, and Equitable is the best option. I am going to have to really scramble to come up with 30% (35% was impossible), but I may be able to just find a way. 

So, let me know what they need the additional 6 months for (i.e. whether this affects the approval, or just specific terms, and if so, which ones), and I will let you know. 



I sent this e-mail at 3:30 on same day, Thursday, December 1. No further word was forthcoming from either lender that my new broker was working with, so we checked into a new motel, did some laundry and settled in.  

Not Acting Diligently to Protect the Client's Interests

Diligence, is a word that implies behaving in a pro-active manner, and not merely reacting to things or waiting for things to happen. So in this instance, a diligent broker would:

1. Understand the lender's information requirements to know exactly what they were looking for, or if he or she didn't understand it, would ask the appropriate questions of the lender. 

2. Communicate those requirements to me clearly, not so much in terms of what documents to provide, but more in terms of what information is needed for the lender to satisfy themselves and be comfortable issuing an approval. It is not good enough to tell a client "provide 6 months of bank statements" if you know that what the lender is really looking for is consistent income that does not fluctuate by more than 25% during that period, for example. 

3. Review the information your client provides you before sending it to the lender. Merely forwarding the information, sight unseen to the lender is both lazy and unprofessional. 

4. Keep their client informed about the progress of the approval process, since the client cannot contact the lender directly. I would expect that in a situation like this, a good broker would update me two or three times a day. This would entail following up with the lenders if they had not gotten back to the broker in a timely way. "They're still looking it at." is not a helpful update. "They are reviewing your monthly gross sales, and are having trouble extracting it from the Paypal reports you sent. Is there any way you can generate a more concise report?" is a useful update. 

I'm fairly convinced that the main reason why this has happened is that Laking did not:

1. Understand what the true information requirements were for the lenders, even though he may have thought he did. But he didn't check and make sure that he knew, before telling me what he needed from me. 

2. Review what I sent him and advise me accordingly, before forwarding the information to the lender. I'm sure I could have included naked pictures of myself with the information, and he would just sent it along.

3. Consequently, this meant that his assurances about us being approved were highly questionable, since he had no real basis for thinking we would be approved. 

4. Tell me what specific information the lenders wanted, which was incredibly frustrating, because I could have given him anything they wanted to see, and I could have done it quickly, because it is what I spent 21 years doing every day. 

5. Keep me updated. I had to call him if I wanted to know how things were progressing. 

As it was, I did not receive a response from him to that e-mail by 10:00 am the next day, on Friday, December 2, which was very surprising. Steph and I finally called him to follow up and discuss with him what he meant when he said that Equitable had approved us. After much pressing, he finally said: "They only have a six month snapshot, and they want to see if the other 6 months is consistent". Now I had forgotten that I actually had some very large individual sales in that first 6 months. My perception was that my sales were lower in that period, which might have been true from a volume perspective, but actually wasn't in dollar terms. So I said to him "Well they won't be exactly consistent, because they have been increasing each month". Then he said: "As long as your statements don't show any significant periods without any sales, you should be good to go, and I will work with you and them throughout the day to get an approval by 5.". So I said "Ok good. I will go to the bank now and get my statements printed and send them to you right away.". 

So with that, I went and consolidated all our funds into one account, so that we could get a certified cheque for the downpayment, and obtained 12 months of statements for all accounts. I sent Laking these statements right away from the lawyer's office. Then I went back to the motel and generated 12 months of Paypal statements from my account and sent them off. Then we waited. We called a few times for updates, and at 3:00 were told that the lender was reviewing the statements still, that the feedback was positive so far, and we were on track to get an approval still by 5pm. With that, we met with our agent to sign an amendment to extend the closing to December 7. We told him that we had been told that we were still on track for 5pm. He told us about the Christmas Festival downtown and then we left his office. 

Then at 4:30, after having not heard from Laking, we decided to call him. The converation that ensured was thus:

Laking: "Hi Stephanie."

Steph: "Hi Mike. So we've got half an hour to go here. What is the latest?"

Laking: "Yeah I just got off the phone with the lender actually. To honest with you they are struggling with the information. Chris, one question: In your value account, there is a period where you have very little activity."

Me: "Yes, there was a period where I built up my Paypal balance to over $8,000, and I drew it out all at once."

Laking: "Yeah I see that."

Me: "OK, there was also a period between November 2015 and March 2016, where I did a lot of buying for stock, and a lot of that was paid for with the funds in my Paypal account."

Laking: "Yeah I see that."

Me: "Ok, I so what is their issue? I don't understand."

Laking: "Well they just don't see the same consistency of income in the first six months. One manager there said that there is a summary report in Paypal that will show your monthly totals."

Me: "I don't think there is, but I will check and get it over to you as soon as I can."

There was more to this conversation after this, but it was mostly in the form of @$%!*&! and was only about another 30 seconds or so.

After I got off the phone I checked Paypal to see if such a report existed. Of course, there was no such report. So I called Paypal support and spoke to someone who said that they could help me generate such a report. They told me that they would have to create a support ticket to generate such a report, but suggested that I produce a comma delimited Excel file and then manipulate it to yield the information the lender was looking for. So I e-mailed Laking back to let him know that this "quick" report would take up to 24 hours to generate, and that I would get it to him as soon as I can. We requested the file from Paypal, got a message that it was in process, and then headed out to the Christmas festival.

We got back to our room at close to 10:00pm. By then Paypal, had notified us that the spreadsheet was ready for download. So I got to work, creating a very clear monthly sales report. By 1:30 am, I was finished. So I sent it off to Laking and went to sleep. 

Predatory Lending Practices

In addition to the banks, and second-tier lenders, there are a number of private lenders who are all too willing to take advantage of people in our position. This was one of the deals that our new broker brought back to us. This lender, after reviewing the value of the property, and our financial situation, was only willing to lend us 63% of the property's value for 1 year at a whopping 12%! That is almost 4 times the going interest rate for a normal credit risk. To close this deal, I would have to borrow just over 15K on my Visa, which is allowed as the lender is fully aware that this is what I would be doing. But it would be a horribly crippling deal that would mean that our monthly cost of living for a year would be almost the same as Toronto. To me, this is the epitome of  predatory lender.

It Is Not About Your Ability To Pay And Never Was

We have all heard the never-ending propaganda in the media about how the Canadian banking system needs to take steps to curb Canada's out of control consumer debt problem. To read it, you would think that we are all a bunch of spoiled children with no impulse control who keep living beyond our means. What is always curiously missing from these news stories and opinion pieces, is how the government, through their continued manipulation of interest rates, have done much to create the problem. For at least the last 15 years, interest rates have been at their lowest levels in history. If that strikes you as odd, it should. It is not natural. It is the result of a deliberate attempt to lull people into a false sense of security, and to suck them into taking on more debt than they can comfortably afford. Why? Two reasons:

1. The banks make a TON of MONEY.
2. People who take on too much debt become slaves to the capitalist system.

When people are slaves, they don't complain about their working conditions, or how much tax they are paying. They fall nicely into line. And that, folks, is what the elites who run this beautiful oligarchy that we call Canada want ultimately. They want to make more money and the want you to not bother them while they do it - on your back.

The other thing you'll keep hearing when being turned down for a loan or mortgage is that the bank needs to satisfy themselves that you can pay your debts. This is complete nonsense because of how willing they are to ignore some of the most obvious pieces of evidence of such ability. For example, Optimum was only offering us a 2 year term on a mortgage for which the monthly payment was in the order of $600 per month. They knew that I had been self employed for 18 months, and that I had managed to pay rent of almost $2,500 a month in Toronto the entire time, and my personal debt had not increased. So obviously I could pay it - four times over actually. Yet they ultimately shafted us and their excuse was that we were too risky.

It just dawned on me last night, that the reason why we are being turned down, is because:

1. The lenders don't see us as being deserving of an approval because they won't make enough money from us.
2. They don't see us as deserving because, by being self-employed, we aren't supporting the system and falling nicely into line.

Think about it. If the banks were really concerned about your ability to pay them, they wouldn't be giving credit cards with $5,000 limits to university students, who are already up to their ears in debt, have no income, and no significant assets. To the contrary, a large part of the profit made by the banks depends on your inability to pay, and their ability to make you think you can pay, simply because you can pay the minimums, when you really can't pay off the debt over the longer term. How? Well take Scotiabank's "You're richer than you think." ad campaigns over the last several years. They are aimed at making you think that you really can afford that $25,000 kitchen reno, or that trip to Italy. In reality, most Canadians are poorer than they realize - having very few hard assets, like collectibles, or gold and instead having highly leveraged assets that are vulnerable to market swings like real estate, or stocks, and a TON of debt, that they have been sucked into taking on because it was so cheap. Kids today have only known low interest rates, their entire lives, so they think that how it is now, is how it will be later. They lack the historic perspective to see what is coming - a massive rise in rates.

Yes, but won't the banks lose big time if rates go up and real estate comes crashing down, with people defaulting left right and centre? Well, yes - if the government lets them fail and doesn't bail them out. But the government will bail them out. You can bet on it. And where will the bailout money come from? From you? Ding! ding! ding! WE HAVE A WINNER!!

So just remember, when you apply for a loan, what the bank really wants to know is:

1. Are you so wealthy that they can make money from you in other ways, by offering you financial products other than the mortgage?

2. If you are not that wealthy, are you the type of person who will will only make the minimum payments, so that they can make money from you forever, on credit cards, the mortgage, and other things?

If you are a frugal person who always pays off their loans, doesn't believe in making their money from stocks, and would rather create it by running a business, and all you have to offer them is a mortgage debt, chances are they won't want to deal with you because you just don't give them enough money to be worthwhile.

It is that simple. Now it all makes sense. 

Wednesday, November 30, 2016

We May Lose the House - The Ugly Side of The Lending Industry

It is 1:51 am and I am writing today's post from the couch in our Drummondville hotel room. For those of you unfamiliar with eastern Canada, it is really one of the last areas in Quebec, where a non-French speaking person like myself can communicate in English and be readily understood - at least until we cross the inter-provincial border into New Brunswick. 

Both Steph and I are exhausted and at our wits end as I write this. We have all our possessions in a 26 foot truck that I am driving for the 1,600 KM trip, and our car, which Steph is driving. Our two lovely cats, Viktor and Meeko are freaking out from 8 hours on the road each day, confined to their small cages. We are supposed to close on our beautiful new home tomorrow, but the unconscionable behavior of a mortgage broker in Fredericton has left us with no financing at the very last minute, and two very upset sellers who are wanting to move to Florida. This is the story of what has happened this past week. It really is unreal. This is a LONG post, for which I apologize. But after what my broker and lender have done to us, I believe I have a civic duty to make as many people as possible aware of what has happened to us, so that others can avoid the same fate. 

On Friday, November 18, we finally received the investor funding that allowed me to repay a portion of my shareholder loans and thus have the money for our downpayment. Following my broker's instructions from our conversation over a month earlier I had my bank print up to date statements for all my accounts to provide to my lender, Optimum Mortgage, to prove that I had the funds for the downpayment. Optimum had given us a commitment to finance 75% of the purchase price of the house on September 29. My broker had given my realtor in Saint John a letter of financing that very clearly stated that we were approved subject to a satisfactory appraisal being obtained on the house. I paid $350 for an appraisal to be done, and it came in at $144,000 - $12,000 higher than what we paid, and $45,000 higher than the amount of the mortgage. Based on this approval, we waived all conditions of purchase and sale and sent our realtor our 5% deposit of $6,600 on September 30 - the day before our wedding. 

So after obtaining the bank statements, I sent them to my broker explaining that I needed him to have Optimum send mortgage instructions to our lawyer in Saint John by Tuesday, November 23, so that I could have a lawyer witness them and courier them, signed, with a certified cheque for the remaining monies to my lawyer by Friday the 25th. This was necessary as my lawyer had advised me that Optimum had a 48 hour turnaround on disbursing funds after receiving the documents, and we were going to start the 2 day drive to Saint John on the 29th. So Optimum had to receive them by the 28th - otherwise we would not be able to move in when we arrived. This would be a huge problem, as we have already opened our utilities accounts for the new house and scheduled hookups for that day. 

I didn't hear back from my broker until about 11pm on Saturday night, November 19. This was his full message:

Hi Chris,

Can you please forward me bank statements for October as well.  I need to show the most recent 90 day history.


He didn't address my direct question to him about our timeline. However I sent him the bank statements that he requested on Sunday. I reiterated the importance of the timeline and asked him to call me. 

On Monday, November 21 there is no call or e-mail from him. I try calling his office again, and I get a voicemail message saying that he is moving his office and will not be reachable until the 22nd. This is the first time I am hearing of this - no mention whatsoever in his earlier e-mails.

On Tuesday, November 22 I am getting really nervous. I frantically call his office and by now it is going straight to voicemail. Not knowing what to do, I call my realtor and ask him for advice. He tells me to call Optimum directly to find our what is going on. I take his advice and call Optimum. The receptionist takes my number and tells me someone will get back to me. About half an hour later, I get a call from Rick Glauser who is one of the senior VP's for sales. He tracks down my file and tells me that they have not received the signed commitment that I sent back to my broker on September 29. He also tells me that he cannot find any evidence of an appraisal having been done as yet. At this point, I can barely contain my anger. I inform him that I sent Mr. Laking (my broker) everything on September 29 and 30th. He says he will check and calls me back, confirming that indeed they have the appraisal, but nothing else. He promises to call Mr. Laking first thing in the morning to get to the bottom this. I feel a bit of relief, but not much. 

About 10 minutes after this call, I get the following e-mail from Mr. Laking:

Hi Chris,

I apologize for the delay in getting back to you as you know we have been relocating our office and everything is finally completed from the moving aspect but our phone provider ran into some issues completing our setup and are still working on finishing everything.  

I received your statements for the 90 days.  I thought you were going to be receiving a large investment from an investor(s) ? I had indicated to the lender that you would have a lot more cash on hand.  I realize you don't need to use it all for down payment but would have on hand to cover living expenses etc.. which does impact their decisions.

Do you have other assets such as RRSP etc?  If so what can you show?  I ask this as this could impact things.  If you could forward me any statements you have for any other investments you hold to show them your assets would be good as they may want to see this.

You are still approved but lenders can change the terms should anything be different than originally declared.

The mortgage instructions come from the lender and I will work with them to hopefully get this out as soon as possible.


I could not believe what I was reading. The extra money he was referring to were some investor monies that I was expecting to receive by January 2017. We discussed those verbally, when we first started talking in August. But at no point did he tell me that our approval was conditional upon us having $50,000 more than our downpayment of $33,000. I actually told him when we were ready to make our offer that the $50,000 would not come until January 2017, at the earliest and that my income and downpayment would have to be sufficient. He assured me that all was approved with what I had sent him in writing. It was clear from this e-mail that he was unaware of my conversation with Mr. Glauser. 

I sent him an e-mail to call me immediately, and I sent this within 2 minutes of him sending me the e-mail. 45 minutes later, when no call was forthcoming, I sent him the following response:

Hi Mike

Since you aren't going to call me like I've asked you to numerous times, I am going to respond in writing. 

I am so angry I really don't know where to start. I just got off the phone with Rick Glauser at Optimum who told me that they had received absolutely nothing from you - no appraisal, no signed commitment, nothing - with 8 days to go. You have not responded to most of my e-mails, nor any of my calls. I have given my notice and will have no place to live in a week if this deal doesn't close. 

I am still waiting for one investor to give me 50K. However, when we first started the loan application process, I was looking at buying a property that was $225K and rural. I wound up buying a property in town  on a double lot that cost $132K and appraised out at 144K.  That's almost $100,000 less than I was originally looking to borrow. My business is generating over $3,500 a month -more than enough to cover all the carrying costs and living expenses without the 50K. I'm putting down 25% - they are only lending me $99,000 and have a value spread of $45,000, with the appraisal. Are you seriously telling me now, on November 22 - 8 days before I am supposed to close that I need to show more than $35,000 in the bank? 

I know you told me that the lender would want to see evidence of the down payment, which I have now given you. But You NEVER said that I would have to show the entire $85,000 or so on hand in order for this to go through. As it turns out, I am still expecting to receive that money - I just don't know when. My investor has run into a snag himself with his real estate project. He can't give it to me until he resolves his issue. 

I don't have any more assets other than my business, which as you know, holds inventory of over $850,000. 

I just don't get it. How could an income stream of $3,000+ per month and 25% equity not be enough? My wife can always go get a job. I have some accounting clients who I will be doing work for to the tune of $6,000 or so over the course of the year. That's another source. The house itself was a B&B and we plan to Air B&B two of the bedrooms, which will generate some more money. 

If all this isn't sufficient then I just don't know what to tell you.  I gave you everything you asked me for Mike. Yes, I didn't get all the money I thought I was going to get when we started this process, but then again, I bought a much cheaper property and to put down a lot more that what we originally discussed, so I didn't think that having more cash in the bank other than what I have now was a factor.

Shaking my head, 

Chris McFetridge 

The following morning I awoke to this response from Mr. Laking:

Hi Chris,

I understand you are upset and frustrated.  I also am aware that you were speaking with Rick at Optimum Mortgage.  Rick isn’t my main contact as he is in management and is currently covering for the territory manager as she is on vacation.  I mainly deal with an Underwriter based in Alberta.  To be completely honest I was also upset after receiving messages from Rick and this one from you last night.  As you know we’ve been relocating our office so the past couple days which is why I was hard to reach.  Prior to that I thought we had plenty of communication, a lot of it was via email but I never realized that was an issue for you.  In all honesty Chris I was going to call you as soon as I had a chance last night.  I was on my way to the office to do so and had an emergency call from family that I needed to look after right away. Fortunately everything turned out ok and was dealt with.  I was hoping to look after that and then come back to call you.  In the mean time after receiving your last email and seeing how upset you were and the message from Rick I thought it best to wait until this morning to contact you.   I am not sure why he would have told you that they didn’t have anything on file for you as that is clearly not the case and I have already contacted him back to ask why or how he said that.  They have many many documents on your file.  I know you were already running on a tight timeline and were already concerned so I am sure this just made things a whole lot worse for you.  I am very sorry for this becoming what it has but we need to work together to get everything finished.

Here is what I have forwarded to Optimum since the beginning: 

They have the Purchase and Sale Agreement, several bank / PayPal statements (they needed these early on to examine the income stream for your business), they do have the appraisal as well (The appraiser is required to send it directly to them, I only made arrangements for it to happen and they do this as they prefer the appraiser to be completely third party) The underwriter on the file actually was speaking with the appraiser after they submitted the report as they requested some modifications to the report so they clearly have it.  They have the signed papers you sent me as well.  They were still needing more information to complete the file such as down payment confirmation and assets.  

There may have been a misunderstanding between us regarding the money you would access to.  Regardless of your down payment requirement, I am required to advise the lender what you have for assets etc.. For this type of file because your business wasn’t run full-time for very long and doesn’t have a long history of generating the income that has been happening more recently they look at things differently.  The amount of cash you have access to does impact their decisions and what they are willing to lend you.  Since you had indicated to me all along that you would have 100k + in cash before closing time I figured it would show in your accounts and when we collected the statements for down payment it would reflect.  So essentially both items would be verified with the same documents.  Since your business doesn’t have a long history of the income that we would normally require it certainly made the lender feel better having the extra cash in the bank to make sure you would have no issues at all with payments.  I understand the extra sources of income that you could generate however the lender isn’t able to verify anything with that since they are future dated events that could happen.  

I have already had contact with Rick this morning he is looking into this further as it doesn’t make sense to me.  So please leave this with me, I am working with Optimum to try and get everything resolved and satisfied for you.  I will update as soon as I can today.

Michael Laking

In essence, he spends the first paragraph giving me a multitude of excuses for his lack of professionalism. Then he tells me that he sent Optimum all the information I sent him. Then he proceeds to chalk all this up to a misunderstanding and blames me for essentially thinking that the commitment that he issued my realtor was iron clad. By the way, here is what he wrote to my realtor, before I waived conditions:

To: Royal Le Page Realty

This letter is to confirm that Chris McFetridge and Stephanie Savage have been approved for mortgage financing to purchase the property located at 213 Lancaster Ave., Saint John NB. The lender has requested that a full appraisal be conducted as well as part of the approval so the clients themselves are approved pending satisfactory appraisal confirming a value of the agreed purchase price or greater. 

Please contact me should you have any further questions.

Michael Laking

Seems pretty clear, doesn't it? No mention anywhere of further asset or income verification being required. So you can see why I was so angered by Mr. Laking's response. Clearly he was either lying when he wrote the financing letter above, or he was lying when he wrote the e-mail above. 

However, I told him I would leave it in his hands that day, which was Wednesday the 23rd. When no update had come in from him by the end of the day, I followed up:


I had hoped to receive an update today, based on your earlier e-mail in which you said you would update me later in the day. Please e-mail me as soon as you receive this message and let me know what the current status is, including what discussions you had with the underwriter, or what their feedback was for the information you provided. I want to know definitively whether of not we are going to get this mortgage. If you don't know, that is fine, then please say so and tell me specifically what still needs to be resolved. 

I re-read your e-mail and I would remind you that on September 17 before I made my offer, I told you (by e-mail) that we could put down 30%. After I knew that there were delays in the receipt of the investor funds I did tell you, but reassured you that we would at least have the down payment.  You told me that the lender would require proof of the downpayment, but did not tell me that they would require me to have additional funds over and above the 25%.  I am a very meticulous and careful person. There is no way that I would have allowed myself to get into a position like this.  I would never have made an offer and waived conditions  if I knew I would have to have 100K in my bank on closing, since I knew that wasn't going to happen by November 30. 


Chris McFetridge, CPA, CA

The following morning, I woke to this response from him:

Hi Chris,

Here is where things stand as of right now:

With the current mortgage that we've been working on the lender is still willing to approve you and fund the deal but they want to adjust the down payment requirements.
The statements you have forwarded are not used to see what you have access to for down payment but also to show your income for your business.  Based on the income the business has generated and what you will have for assets they want you to increase the down payment to 35%.

I know you had indicated that you don't have any other liquid assets that can be used.  Your statements do show funds coming in from RRSP withdrawal, are there no more funds there to consider for this?

If you can show that for the down payment then they will instruct and fund quickly.

I already have another lender looking at things to see if they will offer you an approval with 25% down.
I have had some dialogue with them and things sounded positive but until they give me a final answer I won't know for sure and I am expecting that today.  If they do approve there is a chance they may offer you a bette rate as well but again don't have a final answer on that.

Have you had any income in 2016 from accounting or is everything from the stamp business?
If you had and can show it might change things some but I was under the impression with you doing this business full time that there really wasn't any other income happening from that consistently.

That is all the news I have for now, I know it's not what you were wanting to hear.
Unfortunately lenders do have the right to change anything about the deal until it funds.
I am fairly confident in the other lender but that makes things very tight on time.  We are tight enough as it is.  I wish I had better news.  Please advise if you have any options to increase the down payment.
I know you would be able to come January but that's still a ways away.

Hopefully I'll have better days as the day goes on.

So basically, we were screwed. Optimum knew that we didn't have 35%, but they decided to demand it anyway, even though they issued a commitment to people who were dealing with them in good faith and are moving across 2 provinces. He says that they have the legal right to change anything they want until they fund the deal. I'm not so sure I believe that. I think they have violated common tort law, but they rely on the ignorance of you and I to get away with doing whatever they want. The really sickening thing here is that this is bigger than just Steph and I. There were 4 parties involved here, all of whom have acted in good faith, placing reliance on Optimum's commitment and Mr.Laking's letter of financing:

1. The sellers - a nice retired couple, wanting to move to Florida. 
2. Two realtors who both put in a lot of professional time into this deal.
3. One lawyer, acting for both sides. 
4. Steph and I. 

I am disgusted that I live in a society where a lender can screw seven people over $13,000 - that they haven't even lost, or have any significant risk of losing, and have that behavior protected by law. I just can't believe that this is the country I live in.

I responded to this e-mail by asking him to call me to discuss as I had some ideas. He responded that his daughter was sick and he needed to go and pick her up from school, and that he would get back to me as soon as he could. Then later he requested that I e-mail him sine his daughter was really, really sick. So I did:

 Hi Mike

I have only one option to raise the required 13K on such short notice. I can take  small selection of my best inventory, worth about 40K under normal circumstances and see if my competitor will give me 15-20K for it. I have another colleague in Vancouver that runs a weekly auction that can sell them and likely get more for them. But that will take at least 2-3 months to sell. I can probably persuade them to write a letter to the lender to the effect that they will sell the stamps and can attest to their ultimate value, but I don't know if that will work. 

I do have currently three clients and an ongoing relationship with my old firm. So far in 2016, I earned $2,800 from these clients and next year expect to earn $6,000-$10,000 as I have agreed to take on more work from my old firm. 

The problem here Mike is that had you told me that I would really need 35% and not 25% back when we had time there would have been a lot more options that I could have pursued:

1. I could have sold more medium range inventory at less profit, but not a loss because I could have sought out a buyer. 
2. I could have leaned harder on my investors.
3. I could have spoken to Allen Sloan and gotten more work right away so that I could show the lenders that I would have the work on an ongoing basis. I could have given the lenders a client list and projected billings, as these are all relationships I have had for years. 

But we don't have time for any of this now. You have put me in a situation where I have extremely limited options because you told the lender I would have 100K when they didn't need that much security. The only reason they need it now is because my cash situation is significantly different than what you told them it would be. I sought a second opinion from an independent broker about this and they could see no reason short of you telling the lender that I had more money than I have why the lender would change the deal so drastically and abruptly. 

Who is the other lender you are having discussions with?

Let me know if Optimum will accept a letter from Weeda Stamps verifying that they will be selling stamps over the next three months with an expected value of $20,000, or not. If they will, I will call them and arrange that. 

Let me know if Optimum will accept a letter from Allen Sloan outlining my relationship and expected billings over the next year from work that he plans to give me. 

Please respond to this by noon, even if you can't call or have no additional news. 


Surprisingly, he got back to me right away:

Hi Chris,

Let me talk to Optimum and see what they say about the options you've presented here.
I assume you could get documentation to show you still have a relationship with the accounting firm and they could likely confirm your ability to pickup work and earn extra money going forward?

The other lender is Equitable Bank.  I will hopefully have further updates from both lenders this afternoon.

I will update you as soon as I can.


His question here was a bit annoying since I had already asked him in the above e-mail if  a letter from my former partner would work, and I had told him in detail, over the past two months about the nature of my professional relationship with Allen Sloan. But at least he is finally listening and responding, I think to myself. Shortly thereafter he asks me to obtain the letter and forward it to him. 

At this point, it is just before lunch on Thursday, November 24. I put my store on vacation and started to pack up all our inventory and began disassembling furniture. For the next 24 hours, I receive no new news from Mr.Laking. To his credit, he does send me 2 or three short e-mails to let me know that he is still speaking with Optimum and Equitable Bank, but has no news. 

On Thurday night I called Mr,. Glauser and asked him to call me back. I explained that I did not feel that my broker was handling things professionally, and that I needed to hear straight from him or somebody senior at Optimum, why they were reneging on a commitment they had issued, when there had been no adverse change in our circumstances. He did not return my call. 

Finally on Friday around 3:00pm, I called the underwriter at Optimum, a Liane Geiger whose name appeared on the commitment that she approved. I politely explained to her that I understood that Optimum does not normally deal with clients directly, but this was an extraordinary situation, and could she please discuss my file with me. She seemed hesitant at first, but agreed to speak with me. I asked her why Optimum was yanking my mortgage at the last minute, when they had issued an approval and a commitment. She corrected me and said that they had simply cut back the loan to value percentage from 75% to 65% because of my non-qualifying income. I asked her what she meant by this and her exact words were: "Well you are going from being a full time Chartered Accountant in Toronto, to a self-employed person in New Brunswick. You haven't established enough of a track record to show us that you are capable of earning enough to make the payments. We have to mitigate our risks". I immediately realized that the international nature of my business was lost on her. The rest of the conversation went as follows:

Me: "Ok. So my question to you is why would you issue an approval when you already had the same information about my income in September that you have now, that you have now decided was insufficient to support my application.? You are now inconveniencing a lot of people who have relied on your commitment in good faith."

Her: "I issued the approval based on the information we had."

Me: "So you are telling me that you didn't have any information about my income until last week?"

Her: "No."

Me: "Well there has been a breach of fiduciary duty or something because I can prove to you that I sent Mr. Laking all this information between September 26 and September 29. I had every reason to believe that you had it, Mr. Laking issued a letter of financing to my realtor that very clearly stated that we were approved, subject only to the appraisal, which you now have. Do you have the letter from my firm that I sent yesterday?"

Her: "What letter is this?"

Me: "A letter from my firm regarding a fee splitting arrangement that my former partner and I made between us for clients that I have agreed to provide ongoing assistance with. I sent it to Mr. Laking yesterday and he said he forwarded it to you. Would you like me to e-mail it to you.?"

Her: "Ummm. Sure, go ahead and send it to me. I know you can work remotely but I can't promise that this will change anything. I do promise you that someone, either Rick or myself will get back to you, Ok?"

I sent her the letter, along with the full e-mail trail of the documents I sent to Mr. Laking up to the 29th. In my panic, I couldn't find what I had sent on the 29th and 30th, as Outlook had attached them to a more recent e-mail correspondence with Laking, but I later found them. About a half hour later, I get the following e-mail from Liane:

Hi Chris, I have spoken to Michael and he will be in touch with you shortly. Michael will be talking to you about alternate solutions to your financing needs. Thanks Chris!

I asked her to clarify what she meant by this, but she refused to answer and all my calls to her direct line were immediately re-routed to the reception. 

Mr. Laking then sent me one final turd, coated in milk chocolate and polished to a high shine:

Hi Chris,

After discussing your file at great length with Optimum here is what we have come up with.

First of all, they have decided and made a final call that they will not go back on their decision for the down payment to be increased. So they will require 35%.  However, we have 2-3 ways that we think will work in order for you to get this completed.

Option # 1 - Discuss with Realtor the possibility of the people you are buying from to consider a “vendor take back” mortgage for 10% of the purchase price.  All this means is they essentially would accept for you to give them 90% of the purchase price at closing and register a lien / second mortgage for the small amount of difference.  With the money you have coming through hopefully in January from Investors you could pay this to them at that time to have it removed.  Not sure of they would do this interest free or want increase to accrue but you would have been paying interest on the money anyway should it have come from the mortgage so even if they did it at the same rate or lower wouldn’t cost you anything extra.  This is a fairly common practice and would be the fastest and easiest in my opinion.  So essentially you could proceed with the 25% down payment now and pay the difference later.  If they would agree to this then it make things very quick getting completed and lawyer instructions sent.  This way you don’t need to come up with any extra money and could pay the difference in a few months.

Option # 2 - The credit bureau report we had to obtain for you back when we first started this application showed you had a TD credit facility of 25K with nothing owing, I assume is either a Visa or line of credit.  If you could draw the extra funds from it to make up the difference on what the lender wants, that’s also a fairly quick solution.  You would obviously need to have the money moved into your bank account to have access.  I am not sure if this could be done all at once or if there are limits to have much you can move at one time.  Again, you are expecting 50K in the next few months which could be used to replace this.

Option # 3 - The difference in down payment that they are now requiring could be gifted from family. If this were to be done we would just need a gift letter signed by the family member and show the money in the bank.  I am not sure if you have any family who could do this for you.

I think either of the first 2 options should work and be fairly easy to execute.  

I still have Equitable Bank reviewing your file as well.  They have come back with several questions throughout the day but haven’t made a final decision yet.  I am optimistic they likely will approve but they may not come back with a lower down payment.  Considering the amount of time we have, I think it is easiest to stick with the Optimum deal and use either of the options I have outlined above as they would be fairly quick to get things satisfied so we can still try to close on time.

Let me know your thoughts on which option you think is best.


So basically, he is suggesting that I commit fraud to consummate the deal with Optimum. I say this because option #3 is really not an option, especially since I would have told him if it was. I mean, how many relatives do you have that will just give you $13,000 on short notice? The other two run completely counter to Optimum's terms. If Optimum wasn't comfortable loaning me $99,000 to purchase a $144,000 house, then how on earth would they be comfortable with me having a $13,000 credit card balance, that will have a minimum monthly payment of $600-$650? How would they be comfortable with the sellers having a continued interest in the property? How do I even approach the sellers now at this time to discuss or suggest such a thing?

So I decided that Mr. Laking and I were done. I didn't tell him that just yet, as I wanted to see if he would come back with something from Equitable, but his e-mail above suggests that he hadn't actually sent Equitable anything, and had only had conversations with someone there. Maybe the whole thing was just BS. I'll never know. 

So on Friday afternoon, I gave the go ahead to a new broker that my realtor referred me to. She has been great, and has been working really, really hard for us. I really do hope that in the next few hours we will have better news. Otherwise, we will have to rent here instead of own, which will be a real blow to both of us, but most especially Steph, who has spent the last 2 months acquiring furniture and decorating it. 

The bottom line is: 

1. Don't rely blindly on anything a professional tells you unless their behavior has been professional (i.e. they give you straight answers to your questions, promptly return calls, let you know when they won't be available, avoid giving excuses). If they behave unprofessionally, then that is a sign that what they tell you may be unreliable and that they are unlikely to take responsibility for their mistakes. 

2. Don't do business with Optimum Mortgage or Canadian Western Bank. Even though my broker was the one who initially screwed up, their behavior was reprehensible. They knew the situation and they knew they had issued a commitment, so they should have honoured it, period. They had every opportunity to mitigate their risk before they issued the commitment that we all relied on. What makes them so special that they can issue a commitment and go back on their word? Banks and mortgage companies have a social function in addition to earning a profit. Their right to exist and do business is really not an inalienable right, but a privilege granted by the government and the greater society. They thus have an obligation not to act against the public interest in my opinion. Issuing mortgage commitments and then reneging on them, and injuring multiple innocent parties is not in the public interest - at all. So don't reward organizations that behave like this, and don't kid yourself into thinking that this is an isolated incident, because I very highly doubt that this is the case. 

Well it's 5:21 now. I'd better get some more sleep for the 10 hour drive ahead.