Belleville Family Title Transfer Approved Despite Active Consumer Proposal

1. Executive Summary

A mother in the Belleville area wanted to transfer a rural residential property to her son and daughter-in-law. The mother had an existing mortgage on the property, but it was very small at approximately 10% of the property value. The son and wife had both been living in the property for over 15 years and were working. The major challenge was that the son had an active consumer proposal. A-lender financing was not available, and many B lenders would only consider the file if the consumer proposal was paid before funding or through the mortgage proceeds. The rural location, well water, and septic system added another layer of lender concern. We found a B lender that accepted the structure and approved enough funds to pay out the mother’s mortgage and the son’s consumer proposal.

2. Borrower Profile

The borrowers were the son and his wife, who had lived in the subject property for more than 15 years. Both were working. The son had an active consumer proposal that needed to be paid out as part of the mortgage structure. The mother was transferring the property to them and had a small existing mortgage on title. Borrower names, income, credit scores, proposal amount, and lender details are not disclosed.

3. Property Profile

The property was a rural residential property in the Belleville area of Ontario. It was serviced by well and septic rather than municipal water and sewer. The mother’s existing mortgage was approximately 10% of the property value. Exact address, property value, mortgage amount, appraisal details, well and septic reports, and legal title-transfer details are not disclosed.

4. The Challenge

The son had an active consumer proposal, which made A-lender financing unavailable. Many B lenders may consider borrowers with a consumer proposal, but they often require the proposal to be paid before funding or paid out from the mortgage proceeds. The property location created another challenge because it was rural and serviced by well and septic rather than municipal water and sewer. We wanted to avoid a private lender if a B-lender solution could be found.

5. Why Conventional Solutions Failed

A-lender financing was not available because the son had an active consumer proposal. Many prime lenders generally want the consumer proposal discharged and credit rebuilt before considering the borrower again. B lenders can be more flexible, but many still require the consumer proposal to be paid off either before funding or from mortgage proceeds. The rural nature of the property also narrowed lender appetite because many lenders prefer properties connected to municipal water and sewer rather than well and septic systems.

6. Our Analysis

Our analysis focused on finding a non-private solution that could handle all three issues together: title transfer, active consumer proposal, and rural property servicing. The existing mortgage was low relative to the property value, which helped the file. The son and wife had lived in the property for many years, which supported the family-transfer logic. The required lender needed to accept the property’s rural servicing, allow the consumer proposal to be paid from proceeds, and lend enough to pay out the mother’s existing mortgage at the same time.

7. Financing Structure

The file was structured as a B-lender mortgage used to complete the family title transfer. The mortgage proceeds paid out the mother’s existing mortgage and the son’s consumer proposal. Public details do not disclose the lender name, mortgage amount, rate, fees, property value, loan-to-value, consumer proposal amount, legal structure, or title-transfer consideration.

8. Why the Solution Worked

The solution worked because the lender accepted the full context instead of looking at each issue in isolation. The active consumer proposal was addressed through payout from mortgage proceeds. The rural property was accepted despite well and septic servicing. The low existing mortgage relative to value helped support the security position. The underwriting principle is that B-lender approvals can be possible when credit impairment, title transfer, and property type are all explained and structured correctly.

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