Personal Finance

Second Mortgage Shady Private lender Issues revised statement

  • Last Updated:
  • Nov 6th, 2020 1:52 am
Member
User avatar
May 12, 2006
343 posts
108 upvotes

Second Mortgage Shady Private lender Issues revised statement

This shady private lender has sent another payout statement adding a discharge fee of 700 to closing.

Is this a fair practice for private lenders? There's nothing written in the agreement about the discharge and disbursement fees.

Image
Images
  • Revised2ndmortgage.jpg
10 replies
Deal Fanatic
Jan 15, 2017
5750 posts
6123 upvotes
Ottawa
There are fees to discharge a mortgage and these fees should be outlined in the original mortgage docs. If they aren't there then no, it isn't a fair practice to add them now.
Deal Addict
May 16, 2017
2809 posts
3663 upvotes
Also, which Province? Some of mortgage discharge fee limits.
Member
User avatar
May 12, 2006
343 posts
108 upvotes
The contract states that there's a discharge fee of 700 that would apply, but there are no clearly stated disbursements/legal fee in the document, and they arbitrarily charged 700 on top of it.

Also, there is a 7k charge for brokerage fee in the previous document, i have absolutely no idea what that is for....is it normal to have 7k brokerage fee alone for a 200k private lender mortgage?
Deal Addict
Jul 11, 2010
1294 posts
329 upvotes
Toronto
You need to talk to a real estate agent to see what he/she says.
Doug Boswell
i
Deal Fanatic
Jan 15, 2017
5750 posts
6123 upvotes
Ottawa
dougboswell wrote: You need to talk to a real estate agent to see what he/she says.
What possible value could a real estate agent add to this? We don't even know if the OP is buying a property or is even working with a Realtor.
Deal Fanatic
Jan 15, 2017
5750 posts
6123 upvotes
Ottawa
TechFundi wrote: The contract states that there's a discharge fee of 700 that would apply, but there are no clearly stated disbursements/legal fee in the document, and they arbitrarily charged 700 on top of it.

Also, there is a 7k charge for brokerage fee in the previous document, i have absolutely no idea what that is for....is it normal to have 7k brokerage fee alone for a 200k private lender mortgage?
From the docs that you have in the OP, your mortgage balance was $235,000 and with a monthly payment of $2350 and interest only, you are paying 12% interest. Are you saying that you requested $200k and that $35,000 is additional fees?
Deal Addict
Jan 1, 2013
2126 posts
1449 upvotes
Durham
TechFundi wrote: The contract states that there's a discharge fee of 700 that would apply, but there are no clearly stated disbursements/legal fee in the document, and they arbitrarily charged 700 on top of it.

Also, there is a 7k charge for brokerage fee in the previous document, i have absolutely no idea what that is for....is it normal to have 7k brokerage fee alone for a 200k private lender mortgage?
I’ve seen this happen with Private lenders. But once it is outlined in their docs that were initially signed, then its fair game. The one thing Privates do, is clearly put their fees, they charge for everything.

As for the brokerage fee, yes you have to pay a brokerage fee on private deals as the broker does not get paid directly from the investor. But why are you questioning fees now during the payout? Lawyer, broker should have gone over that in detail.
Deal Fanatic
Apr 5, 2016
6116 posts
4613 upvotes
Calgary/Vancouver
That’s how private lenders operate. Charge high interest and fees because you are considered high risk to them.

Check your provinces regulations. There should be a discharge fee limit. In BC, can’t charge more than $75.

Hopefully this serves as a reminder to be very careful when dealing with a private lender. Sometimes it’s best to just save up more for the down payment so you get approved from a A or B lender.
Deal Addict
Jul 11, 2010
1294 posts
329 upvotes
Toronto
Misprint. You need to talk to a lawyer to see what he/she says.
Doug Boswell
i
Sr. Member
Mar 14, 2018
542 posts
385 upvotes
TechFundi wrote: This shady private lender has sent another payout statement adding a discharge fee of 700 to closing.

Is this a fair practice for private lenders? There's nothing written in the agreement about the discharge and disbursement fees.

Image
Can you please let us know who the private lender is, you can potentially save us the headache.

Top