Cambridge Private Mortgage Used to Pay First Mortgage, CRA Debt, and Consumer Proposal

1. Executive Summary

Clients in Cambridge had strong household income. The husband worked on commission, and the wife was salaried. However, after an accounting or tax-filing issue, they ended up with a major mid-six-figure CRA liability. They also had an active consumer proposal. Despite the income strength, conventional mortgage options were not workable because the liability and credit profile were too severe. We arranged a private mortgage that paid off the existing first mortgage, CRA dues, and the consumer proposal.

2. Borrower Profile

The borrowers were a married couple in Cambridge, Ontario. The husband earned commission income, and the wife earned salaried income. Their household income was strong, but the file was affected by a large CRA liability and an active consumer proposal. Borrower identity, employer names, income amounts, credit scores, CRA balance, proposal amount, and lender details are not disclosed.

3. Property Profile

The mortgage was secured against a residential property in Cambridge, Ontario. The private mortgage replaced the existing first mortgage and also provided funds to pay CRA dues and the consumer proposal. Exact address, property value, existing mortgage balance, private mortgage amount, rate, fees, and loan-to-value are not disclosed.

4. The Challenge

The clients had strong income, but the credit and liability profile made conventional financing unrealistic. A large CRA liability had arisen after an accounting or tax-filing issue, and the clients also had an active consumer proposal. A lenders were not suitable, and B-lender options were extremely limited because of the size of the CRA debt, the active proposal, and the need to pay multiple obligations at once.

5. Why Conventional Solutions Failed

A conventional approval was not realistic because the clients had both a large CRA liability and an active consumer proposal. A strong income profile can help with affordability, but lenders also review credit, tax obligations, existing debt, title risk, and overall repayment risk. The active consumer proposal alone would make many A lenders unavailable, and the large CRA liability added another major obstacle. The file required a lender that could address the full payout structure rather than only the income side of the application.

6. Our Analysis

Our analysis focused on restructuring the full liability picture. The clients did not simply need a better rate or a small refinance. They needed a mortgage large enough to pay the existing first mortgage, the CRA liability, and the consumer proposal. Because A-lender and B-lender options were not practical, we positioned the file for private lending, supported by property equity, payout instructions, and a short-term plan to stabilize the clients’ financial position.

7. Financing Structure

The file was structured as a private first mortgage. The proceeds were used to pay out the existing first mortgage, the CRA dues, and the active consumer proposal. Public details do not disclose the lender name, mortgage amount, rate, fees, term, property value, loan-to-value, CRA payout amount, consumer proposal payout amount, or borrower identity.

8. Why the Solution Worked

The solution worked because the private mortgage addressed all major obstacles in one structure. Paying out the existing first mortgage alone would not have solved the CRA issue or the consumer proposal. Paying only the consumer proposal would not have dealt with the tax liability. The private mortgage created a single short-term restructuring solution. The underwriting principle is that in severe tax-debt and proposal files, the solution must clear the debts that are preventing future lender options.

10. Related HopeWell Resources