Are core private mortgage loans still “core”? Currently, I don't think so. I'd love to put some basics back in the mix.
I’ll be brief. I think we’ll all agree that this calendar year has so far been a very busy one in our private mortgage market. For LRPM, it’s been our biggest since inception. There are many reasons which I don’t propose to go into – brokers and borrowers alike already know.
While settlement volume has been strong, what I find interesting though is the nature of those settlements. They have been incredibly varied, often challenging, but yet don’t generally fit into what I consider our core business.
Only one settlement this calendar year has been an urgent first mortgage loan, no valuation necessary, non-code loan, secured by existing residential property, borrowed by a company under a third party mortgage, and for $1.00M.
The majority have been far more complex, larger and in some way development related. And we’ll still welcome those proposals. But they can be draining, can’t they?
And it has left a time and servicing gap. We have numerous private mortgage investors whose preference remains in the $0.50 M to $1.00 M. They have cash on hand and I’m contacted frequently asking for loans of this nature.
Frankly, I don’t have them at present; but I would like to shake some out of the trees. So, without beating about the bush (pardon the pun), if you have any (including offshore investors not presently being funded under the banking system), please call me about them.
In relation to the latter, but because of the need for nimble settlement and our primarily asset based approach, a number of developers are considering interest rate subsidy on behalf of purchasers to settle sales until the current bank reluctance to fund has washed through.
We’re here. We have the funds available for smaller, straightforward transactions for timely settlement. Yes, we still do the larger, more complex ones, but frankly, it would make more sense to mix it up a little with some smaller loans secured by existing residential and/or commercial properties – they’re easier to do quickly, and that, at the end of the day, is my primary driver in this private (essentially first mortgage) market.
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