Frequently Asked Questions

Browse our Broker and Borrower FAQ categories

• General

  Q: What is a private mortgage? How does it differ from a traditional bank mortgage?

  A private mortgage is an alternative source of financing funded by individuals or smaller corporations. Private lenders can be more flexible with their lending criteria, offer shorter terms, and lend to borrowers who may not qualify under traditional lending guidelines. Private mortgages are not insured, usually have a shorter term (typically one year or less) and lend to 85% or less of the LTV.

  Private mortgages can be useful for clients in several situations, including:

  • Borrowers with challenged credit, or with property/income taxes owing
  • Self-employed borrowers and those with irregular income
  • Borrowers that are in between jobs, or those going through a separation/divorce
  • Borrowers who want to improve their credit score using debt consolidation
  • Real estate investors purchasing an investment property
  • Borrowers who need quick or short-term financing
  • Borrowers who are new to Canada
  • Borrowers looking to finance a new construction property
  • Borrowers who require a second mortgage

  
  Q: Does CMI offer mortgages directly to borrowers? 

  No. CMI deals directly through mortgage brokers and fully respects any exclusivity agreements they may have in place. New borrower inquiries are referred to a mortgage broker, and existing borrowers are redirected back to the originating broker.

  
  Q: I am an individual borrower. Can/how do I apply for a mortgage with CMI?

  CMI is not a consumer-direct lender and does not deal directly with borrowers. Instead, CMI works exclusively with mortgage brokers. All new applications must come to CMI from a broker. To apply for a private mortgage, CMI can connect you to one of our preferred broker partners who can assist you with the mortgage application process.

• Mortgage Servicing

  Q: Can CMI waive a borrower’s fees?

  Fees are charged as per Schedule A of the Mortgage Commitment and cannot be waived.

  
  Q: Does CMI work with a third-party payment processor?

  CMI acts as a direct payment processor (PAD). Its team of in-house mortgage administration experts manage all post-closing administration matters including payment processing as well as arrears and default payment management.

  
  Q: Can a borrower change their payment to bi-weekly or schedule it for a particular day of the month – for example, to align with their pay date?

  No. While many CMI mortgage features are customizable, the payment date and frequency are not. As per the Borrower Disclosure, all payments are due on the 1st of each month.

  
  Q: Can mortgages be prepaid?

  Yes. CMI provides prepaid mortgages (for the entire term or a portion of it) depending on the borrower’s needs. Prepaid mortgages involve advancing the total value of payments over the term of the mortgage up front as part of the mortgage proceeds on the funding date. CMI does not offer mortgages where the prepaid amount is used to subsidize monthly payments by evenly spreading the pre-paid payment across the term.

  
  Q: Can a borrower defer their monthly payment?

  Generally, no.  In select circumstances, CMI may review a borrower’s deferral request.

  
  Q: What process is followed for missed or non-sufficient funds (NSF) payments?

  If the first attempt at payment collection is returned NSF, CMI will automatically attempt to collect the payment again mid-month.  If the second attempt at payment collection is returned NSF,

  CMI’s administration department contacts the borrower(s) by telephone and email to resolve the payment by direct deposit or e-transfer. The resolution process can take anywhere from 48 hours to 20 business days. If the borrower fails to bring the mortgage up to date, legal enforcement may be warranted.

  
  Q: My insurance was never cancelled. Can you waive the fee?

  This fee is standard under the terms of the commitment. Borrowers can request a review of fees on a case by case basis.

  
  Q: Why would a borrower’s mortgage balance remain unchanged when monthly payments are being made?

  Under the terms of an interest-only mortgage, a borrower’s monthly payment consists only of interest for the month; there is no principal repayment. As a result, the mortgage principal amount will remain unchanged over the term of the loan. These details can be found in the original Mortgage Commitment.

  
  Q: Does CMI conduct quality control reviews during the term of the mortgage?

  CMI’s fulfillment and compliance teams provide ongoing quality control reviews throughout the entire term of the mortgage, ensuring all regulatory documentation is in order and validating any additional compliance documentation.

• Mortgage Renewal and Discharge

  Q: What is CMI’s renewal process?

  CMI manages all mortgage renewals in-house. A renewal reminder is sent 90 days prior to the maturity date to both the broker and their client. CMI contacts the borrower 60 days prior to maturity to determine their future intentions and discuss potential renewal options. Once we confirm a borrower’s intention to renew, our renewal team assesses both current market conditions and repayment history to determine any renewal offers and the associated rate and fees.

  
  Q: Is a borrower required to use a mortgage broker to renew their CMI mortgage?

  No. Borrowers can renew their mortgage directly with CMI.

  
  Q: Can a borrower add funds to their mortgage at renewal?

  Unfortunately, no. A borrower requiring additional funds at renewal should consult their mortgage broker to determine if they qualify. If appropriate, the broker can submit an application to CMI’s origination team for a larger mortgage.

  
  Q: Can a borrower prepay their upcoming term at renewal?

  Unfortunately, no.  A borrower interested in another prepaid term should consult their broker to see if you would qualify.  If appropriate, the broker can submit an application to CMI’s origination team for a larger (pre-paid) mortgage.

  
  Q: Can a borrower renew on a month to month basis?

  Short term extensions are considered and reviewed on a case by case basis.

  
  Q: How is the renewal potential of a mortgage assessed?

  CMI’s renewal team will assess current market conditions, rates, and repayment history to determine any renewal offers and the associated rate and fees. Renewal evaluations may also include conducting property assessments, ensuring property taxes are fully paid and confirming insurance is in place before a final decision is made.

  
  Q: Can brokers be involved in the renewal process?

  Brokers are welcome to assist their borrower clients in the renewal process; however, CMI does not pay broker fees at renewal, and brokers are not to charge borrowers broker fees for their involvement.

  
  Q: Why would a borrower with good repayment be unable to renew their CMI mortgage?

  Private mortgages are underwritten with an exit strategy – a plan to move from the private space back to a mainstream lender – as a key consideration. If the exit strategy changes and the borrower wishes to renew with CMI, requests are adjudicated on a case by case basis based on a variety of factors, including market conditions, repayment history, loan-to-value (LTV) ratios, property location and risk. Renewals are never guaranteed.

  
  Q: Does CMI charge renewal fees?

  A renewal fee is charged to facilitate a new term when requested by the borrower. Unlike most lenders, CMI does not charge the entire lender fee again at renewal. Renewal fees are generally between 1% and 2% of the outstanding balance. This fee is determined on a case by case basis subject to market conditions, mortgage size and yield of investment, as well as the borrower’s repayment history. In many cases, CMI will defer most of our renewal fees until discharge to help make renewals affordable for the borrower.

  
  Q: Why does it appear that a borrower is being charged three separate renewal fees?

  CMI charges one renewal fee, which is broken down on the Renewal Agreement according to the portion paid to the investor(s) and the portion paid to CMI.

  
  Q: Are legal fees charged at renewal?

  No. Unless there is a requirement to amend the original and material terms of the mortgage, there will be no additional legal fees at renewal. Borrowers are welcome to obtain independent legal advice at any time (at their own expense).

  
  Q: Does CMI collect a broker fee at renewal?

  No. CMI does not pay broker fees at renewal.

  
  Q: Does CMI charge for an extension?

  In most cases, CMI will grant a 15 day grace period (extension) following maturity without charging a renewal or default fee.   Any extension beyond 15 days will be treated as a short-term renewal and subject to a renewal fee.

  
  Q: What are CMI’s mortgage discharge fees?

  Borrowers can expect to pay a $500 discharge fee, legal fees of $1,500 plus HST, as well as any disbursements. An additional fee will be charged for ‘rush’ requests.

  
  Q: Under what circumstances would a penalty fee be charged at the time of mortgage discharge?

   In most cases, CMI will grant a 15 day grace period (extension) following maturity without charging a default fee.  After 15 days, the mortgage is in default and a penalty is charged in accordance with Schedule A of the Mortgage Commitment.

  
  Q: Can CMI waive the penalty/default fee?

  No. Fees are charged as per schedule A of the Mortgage Commitment and cannot be waived.

  
  Q: Can a broker or borrower order a mortgage discharge statement?

  Discharge statements can be ordered only by the borrower’s lawyer once a firm closing date is confirmed. If a borrower requires an estimated payout amount for refinancing purposes, CMI would be glad to assist by providing this information in an email.

  
  Q: On bundle deals, does CMI charge separate discharge fees for each mortgage?

  Yes. Since bundle deals are treated as separate deals and have different investors, borrowers can expect to pay discharge fees for each mortgage.

• Mortgage Default and Enforcement

  Q: What is the difference between mortgage delinquency and mortgage default?

  A mortgage is considered delinquent if it is less than 90 days in arrears (past due on a missing payment). A mortgage is in default if it is more than 90 days in arrears or experienced a “triggering event” (see below). CMI’s recovery team is engaged in the case of ongoing arrears to move ahead with a resolution process that involves monitored repayment, and where necessary, active enforcement and liquidation of the underlying property.

  
  Q: What process is followed if a mortgage is in arrears and the borrower fails to bring the mortgage up to date during the resolution process?

  CMI’s administration department contacts the borrower(s) within 24 hours of any missed or NSF payments to resolve the payment and manages all follow up, including phone calls, text messages, email, and registered letters.

  If administration is unable to reach the borrower, or if the borrower fails to bring the mortgage up to date during the resolution process (within 20 business days), the file is escalated for review and adjudication and may be placed on enforcement watch. If the file is referred for enforcement, a default charge equivalent to three months’ interest is levied against the borrower at the time of payout.

  
  Q: Following what triggering events would mortgage enforcement be required?

  Mortgage enforcement is required when a borrower fails to comply with the agreed-upon terms in the mortgage contract. At the time of a “triggering event”, the mortgage moves into a high-touch and hands-on manual process that is carefully managed by CMI’s administration team.

  Enforcement may be necessary under specific circumstances, including:

  • Mortgage arrears:
    • More than three NSF occurrences
    • NSF payment unresolved within 15 days, with no communication from the borrower
    • Payment arrangement not followed through and 15 days past due
  • First mortgage arrears/condo or tax lien not promptly resolved by the borrower
  • More than three combined insurance (claim) notifications and/or default occurrences
  • Mortgage 15 days past maturity without borrower response (in the form of a signed renewal or payout documentation)

  
  Q: What is CMI’s enforcement process?

  If there is no satisfactory resolution to payment arrears, the mortgage moves to CMI’s dedicated enforcement team where it follows a rigorous collections process:

  • Immediate adjudication of loan, including an assessment of the triggering event, payment history, communication history, property value, current market conditions and environmental conditions
  • Immediate outreach to borrower to encourage communication and immediate resolution
  • Development of a customized go-forward plan to address default based on each loan’s – and borrower’s – unique circumstances

   

  If there is no satisfactory resolution, legal action is initiated, and the first legal demand letter is issued. Based on the jurisdiction of the default, application for court ordered notice of sale is initiated. After the court-mandated timelines expire, repossession of the mortgaged property is initiated.

• General Administration

  Q: If a broker has a question about their borrower’s CMI mortgage, who should they contact?

  Brokers can contact CMI at 1 (888) 465 1432, option 4, and a member of CMI’s mortgage servicing team will be happy to assist.

  
  Q: If a borrower has a question about their CMI mortgage, who should they contact?

  Borrowers can contact CMI at 1 (888) 465 1432, option 4, and a member of CMI’s mortgage servicing team will be happy to assist.

  Contact us today to learn more about CMI’s private mortgage solutions.